Understanding the Real Factors Behind Changing Insurance Markets and the Importance of Public Adjusters

By Matthew Sengsourinh, President of GlobalPro Florida

In recent times, there’s been a lot of discussion around the rising costs and changing dynamics of the property and casualty (P&C) insurance market. As someone deeply involved in both construction and insurance industries, I’ve closely followed these trends, including the misleading data often circulated and the enlightening findings of recent studies, such as the J.D. Power report. My experience has consistently shown that policyholders need strong advocates, particularly public adjusters, to protect their interests, especially in the wake of a loss.

The Misleading Data Narrative

For years, we’ve heard that claims and lawsuits are the primary drivers of increasing insurance costs. However, recent analyses and studies challenge this narrative. In Florida, for instance, a comprehensive study found that litigated claims, though costly, constituted a small fraction of total claims, and there was no substantial evidence linking them directly to soaring premiums. This contradicts the often-repeated assertion that litigation is the main culprit for the industry’s woes.

Insights from the J.D. Power Report

The recent J.D. Power report published in Property Casualty 360 sheds light on the real factors affecting the P&C insurance market. It’s not claims or lawsuits causing the shifts; rather, it’s the insurers’ business practices and the financial market dynamics. Let’s briefly look at the five reasons outlined in the report:

1. Inflation Impacting Rates: Rising costs for replacement vehicles, medical claims, and other loss-related expenses are straining insurers’ bottom lines.
2. Growth of Usage-Based Insurance (UBI): UBI is becoming more prevalent, indicating a shift in how insurance products are structured and sold.
3. Targeting Profitable Consumers: Insurers are increasingly focusing on consumers who are less likely to switch carriers and offer more profit potential.
4. Insurers Pulling Back in Certain Markets: In response to unprofitable business, insurers are reducing their presence in some markets.
5. Decline in Claims Satisfaction: A decrease in customer satisfaction during claims is pushing more consumers to shop around.

These factors point to a fundamental shift in how insurers operate, driven more by internal strategic decisions and external economic pressures than by policyholder actions.

The Need for Public Adjusters

In this evolving landscape, policyholders are often at a disadvantage when recovering from a loss. Insurance policies can be complex, and navigating the claims process can be daunting, especially when insurers are increasingly focusing on their bottom lines. This is where public adjusters come in. As a nationally licensed public adjuster myself, I’ve seen firsthand how vital our role is in leveling the playing field.

Public adjusters are advocates for the policyholder, working to ensure that claims are fairly valued and compensated. We bring expertise in understanding policy language, assessing damage accurately, and negotiating with insurance companies. In a market where insurers are increasingly driven by profit motives and operational efficiencies, having an expert on your side who understands the intricacies of the industry is more important than ever.

Conclusion

The narrative that claims and lawsuits are the primary drivers of changes in the P&C insurance market is misleading. Recent findings and reports like the one from J.D. Power highlight that it’s the insurers’ business practices and the financial market impacting the landscape. In such a scenario, policyholders need a knowledgeable and experienced advocate, and that’s precisely the role a public adjuster plays. When recovering from a loss, having a public adjuster on your side can make all the difference in protecting your interests from the onset.

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