As we move closer to 2025, the insurance market presents a window of opportunity with a period of relative stability compared to the volatility of recent years. For CFOs, this steadiness is a chance to manage insurance costs more effectively, sharpen risk management strategies and safeguard profit margins against future uncertainties.

Assessing the rate landscape

Insurance rates are expected to remain steady through the rest of 2024, with exceptions in catastrophe-prone (CAT) areas or for businesses with challenging claims histories. The expected rate increases are moderate, a welcome change from the steep hikes seen in recent years. This environment gives CFOs the opportunity to fine-tune their insurance strategies, allocate financial resources smartly and prepare for potential risks ahead.

Property insurance rates are expected to see slight increases or remain flat. Businesses with a strong claims history and robust risk management practices could even secure flat renewals or reductions in areas like workers’ compensation, directors & officers (D&O) and cyber coverage. This is not only the time to look closely at where savings can be made and how to stretch your budget to cover any necessary adjustments, but it’s also the right time to work in partnership with your broker to develop solutions that meet your organization’s needs.

Preparing for disruptive events

Severe weather continues to pose significant challenges, particularly for businesses in high-risk areas. Wildfires, flooding, and hurricanes drive premiums upward, making preparedness essential. Beyond weather, risks like cyberattacks and geopolitical instability also threaten business continuity, potentially disrupting cash flow, driving up costs and cutting into profitability.

With business interruption ranked as the second-greatest concern among risk professionals, right after cybercrime[1], CFOs need a proactive approach: a solid risk management plan that anticipates disruptions and adequately addresses the right coverage and duration of business interruption (BI) insurance to minimize financial fallout. Knowing how these events could affect your organization’s financial health is key to staying ahead of the curve and can be assessed by performing a business impact analysis. Talk to your broker about the duration of your BI policy: is 12 months enough in the wake of a CAT event where a total rebuild of your property may be required? Now is the time to ask these questions and develop or update your coverage.

Looking at creative coverage options

For organizations in high-risk areas, options like captive solutions and parametric insurance can offer more tailored, cost-effective protection than traditional insurance markets. Embracing these innovative solutions helps CFOs navigate the complexities of the current market while maintaining stability. This is another opportunity to lean on your broker for guidance, customized solutions and ways to save money while increasing coverage to meet your needs.

By considering these alternatives, you can better protect your organization from unexpected challenges, ensuring resilience and financial stability.

Steps to take now with your broker

1. Stay Informed and Identify Cost-Saving Opportunities: Dive into HUB’s Third Quarter 2024 Rate Report to uncover opportunities to optimize your insurance portfolio. Use this insight to plan your budget and reduce overall risk exposure.
2. Assess Your Insurance Providers: Choose partners who are financially sound, especially in high-risk regions. Working with top-rated carriers— even at a premium—helps protect your organization from market volatility that could leave you exposed.
3. Refine Your Risk Management Strategy: Take this time to revisit your risk management plans, focusing on business continuity and disaster recovery. Proactively strengthening these areas helps you mitigate disruptions and enhance your organization's resilience.

Moving forward with confidence

The action you take today can secure your organization’s financial future in the long term. Stay informed, evaluate your insurance coverage strategically, reinforce your risk management approach and work with your broker to leverage this period of stability to strengthen your organization’s resilience, optimize costs and prepare for whatever lies ahead.

For more tailored strategies and insights, download HUB’s Q3 Rate Report.