The Why Behind Rate Increases

rate increases

At this point, you likely have noticed that prices for just about everything have increased. From interest rates to gas and food. The impact of inflation on the economy is seen and felt by many. CNBC reports that core inflation jumped to its highest level since 1982. Inflation has also impacted the costs for insurance carriers to do business, increasing the costs of operations and claims, and resulting in rate increases.   

To retain rate adequacy, insurers consistently review trends to make appropriate adjustments. Insurers also look to reduce expenses internally by using technology to better price risks and improve underwriting, streamlining processes using automation, and sometimes having to take more drastic actions to reduce expenses. Despite taking these measures, to sustain business and counter inflation many insurers will also look to rate increases.    

One other driver for policy premium changes are customers making changes to their insurance policy. Insurance customers may experience changes in risk profiles such as growing their business, purchasing a new building, and hiring new employees. These changes may result in the customer needing to update limits and/or deductibles due to the exposure or risk changes. These changes to your risk profile will ultimately impact the premium charged by your insurance carrier. 

It is important to note that rate increases do not happen in a vacuum and insurers cannot raise rates without rigorous review and approval from state departments of insurance. The use of independent rate bureaus informs insurers of statistical and actuarial data across the insurance marketplace. These sources provide much-needed information for insurers on where to place business, increase or decrease expenses and rates. Every insurance company is required to provide actuarial data to support rate changes and must undergo state-by-state approval processes before rate changes are implemented.   

Coterie Insurance has taken every effort to maintain insurance products that are competitive, affordable, and easy. This includes maintaining our existing rates for the last three years. Remaining true to our focus on speed, simplicity and service has not been easy but we have taken every step to stay true to those values.    

Coterie has also taken steps to reduce underwriting expenses with the introduction of intelligent data-driven underwriting with our use of the Coterie Dashboard. These measures coupled with our existing seamless automated user experience and a small rate revision ensure that we are well-positioned to endure any economic uncertainty ahead.   

Related Resources

Agents & Brokers

Let's Work Together

Small Businesses

Policyholder Help Center

At Coterie, we are putting relationships at the forefront of small business insurance.

If you have any questions, Contact Us Today!