Industry Forecast 2022: The Coming Year in Insurance

As part of our commitment to providing superior advocacy to clients, our team at Morris & Garritano is dedicated to remaining at the forefront of the industry and proactively navigating market trends and fluctuations. In this, we are able to offer our clients an acute knowledge of the industry and provide the valuable resources and communication required for them to run their businesses, protect their assets, and provide for their employees.

In light of this pursuit and the coming of the new year, we discuss our expectations for current and continuing market trends, the challenges of the past year, and our anticipations for the next.

Economic Disruptions: Cautious movement towards normalcy

As the pandemic slowly ebbs towards an endemic, the global economy is seeing significant improvement this year with further stabilization cautiously expected to continue in 2022. The potential for further setbacks from virus resurgence, however, continues to threaten economic normalcy.

While workplaces begin to repopulate and employees in many sectors make the shift back to in-person environments, we experienced a rise in rates this year (particularly in commercial property with a 5.77% jump and umbrella policies at a 4.97% increase) and a hardening of the market that is expected to continue well into the next year and beyond. Carriers are adjusting to increased usage and demands with so many sectors still navigating the uncertainty of long-term effects from the COVID-19 virus.

Personal Lines: Uphill battle towards stabilization

With escalating risk from California’s climate and economy, carriers and their insureds are facing major disruptions and tightening markets. These difficulties are expected to continue and our team at M&G is proactively working to mediate these challenges. “We’re all in this together,” Erin Powers, Personal Lines Manager at M&G, encourages.

Committed to development as a steadily growing yet nimble, independent agency, our team is equipped to remain at the forefront of advocacy, brokering personalized policies.

“We will use every resource available to tailor solutions for our clients,” Erin continues. “We’re here to help during these challenging times.”

Wildfire Risk: Impacts on California property insurance

The risk of wildfires in the state is causing heavy disruptions in the property insurance market. The industry is facing rising carrier saturation and increasing property rates where 20,000-foot view underwriting with satellite imagery and underwriting scrutiny are negatively affecting commercial, residential, rural, and urban properties throughout California.

“We are wholly involved in this situation and are in full alignment with the angst of our clients,” says Daniel Gilman, Commercial Risk Advisor at Morris & Garritano. “It’s unfortunate the industry has gotten to the point of seeing a 10% rate increase as the norm.”

Further challenges are forecasted but Daniel notes the agency’s preparedness to handle them and keep clients informed. “While communication with our clients and carrier partners is key,” Daniel continues, “We aren’t stopping there. We’re engaging with our legislators, the insurance commissioner, and consumer advocacy groups as we work to collectively move towards solutions.”

Emphasis on Cyber Insurance: An essential for all businesses

Dependency on digital work environments continued its steep incline this year and following that trajectory was an increase in cyber crime. Small businesses became the preferred targets of cyber criminals who continue to prey on companies with less robust security systems.

The demand and push for cybersecurity will carry strongly through the coming year with increased emphasis by providers and brokers. Mark Anelli, Commercial Lines Practice Leader & Sr. Risk Advisor with Morris & Garritano weighs in stating, “Robust cyber insurance and protective policies have become crucial coverage for companies of all sizes.” He continues saying, “Emphasis on and demand for cyber insurance will increase with the coming year.”

To combat the continuing rise of cyber threats, employers are being pushed by providers to provide more adequate digital hygiene measures and training protocols in their workplace, with MFA becoming standard implementation.

The Digital Landscape: Leveraging of new technologies across sectors

2022 will bring a continued, potentially everlasting, reliance and dependency on digital technologies to connect companies, employees, and clients across the globe. The workplace will continue to evolve into a more fluid, digital space, and employers are being expected to adapt. The coming year will reveal a division between businesses flexible to evolve and those unable to keep up.

Whether communicating with employees internally or clients externally, the leveraging of existing or emerging technologies will define a new era of business across sectors. At M&G, we take pride in our own proven adaptability to leverage the new technologies and connectivity across our company. We will continue to bring new resources and valuable communication to our clients as we navigate these environmental challenges and reshaping of the workplace.

Workplace Fluidity: Uncertainty in legislation and compliance policies

As courts await the legislation of new policies, mandates, and laws, employers are encouraged to remain vigilant and on high alert as new requirements for adaptation and changes in coverage are likely to be implemented.

Our advocates at M&G will remain at the forefront of these updates with regular communication to clients ensuring that those we serve are prepared and equipped to adapt as needed, minimizing workflow disruptions.

Employee Benefits: New demands and expectations

Carrying into 2022, employees will continue to hold the upper hand in the ever-tightening hiring market. Increased demands are being made of employers as workers feel a shift in priorities going back to the workplace. The balance of one’s professional and personal lives is being emphasized with demands for greater flexibility and wellness being made.

“The way we support employees has changed,” says Dan Troy, Principal and Sr. Benefits Advisor, at Morris & Garritano. “The importance of benefits is increasing, and the long-term impacts are worth the investment.” In this recognition and prioritization of employee well-being, companies can expect greater retention and productivity from their workforce.

This year, we’ve released several webinars and articles discussing the importance of promoting wellness in the workplace as well as implementing a family-friendly culture to attract and retain talent. Recruiting and retaining employees will continue to be a challenge for employers unwilling to adapt. Those that can rise to the new demands of the workforce can emerge as the employer of choice and expect a more engaged and productive workforce.

Ben Hoover, Morris & Garritano’s Sr. Employee Benefits Advisor & Practice Leader notes the trends saying employers will need to provide a “robust and competitive benefits package” in the coming year to recruit and retain in what he notes as “one of the tightest employment markets we have seen in many years.”

What employees are looking for most in a benefits package: better support for well-being and sustainable flexibility.

Emphasis on Mental Health and Well-being

Employees are expecting (dare we say, demanding) increased coverage for mental health and the standardization of digital telehealth access.

With this enduring season of instability, the onset of new stressors has many employees re-evaluating what they’re willing to sacrifice for a job. New attention is being given to one’s overall wellbeing and the narrative around burnout is shattering the age-old rat race.

Many companies are leaning into these trends in demand and redefining what a benefits package looks like and offering increased sick days or expensable wellness memberships and programs for their workforce. Employers should expect pressure from their workforce to bring expanded care and coverage to their employees and lean into the assurance that investing in employees creates a stronger more loyal employee base.

Emphasis on Flexibility and Work-Life Balance

In many sectors, the traditional workplace is being redefined as a fluid, flexible environment and more adaptability is to be expected as a new normal is being formed. The past year showed us how many businesses can sustain a remote workforce and the mass majority of workers who prefer it stay that way.

In 2022, we can expect to see companies settling into the permanency of remote or hybrid environments. Employees, particularly those responsible for caretaking, will drive the standardization of flexible work hours and environments. Companies that are able to adapt to these new demands and evolve to maintain productivity and connectedness will usher in a new era and model of the modern workforce.

2022 will likely define a new normal rather than return to the one we left behind.

Morris & Garritano: Continuing to provide exceptional service and superior advocacy

At Morris & Garritano, we are dedicated to remaining at the forefront of the industry, facing onset challenges, understanding market trends, and leveraging new technology to best enable us in our mission.

Year over year, our team proves how capable we are to consistently offer trusted, superior service while keeping our clients well-informed and protected through ever-changing climates. We’re optimistic about the future and our proven ability to continue our mission. Bring what the future may, our clients can be assured in the consistency of exceptional service and superior advocacy from our team at Morris & Garritano.