1111 Year-end 2022 U.S. Business Insurance State of the Market Report 1 Understand your own risk pro昀椀le and risk tolerance threshold. »Reevaluate your risk tolerance threshold and determine if there is room to retain more risk to ease challenges. Economic volatility can impact an insured’s capital allocations and thus insurance strategies from a risk retention and risk transfer Be proactive. point of view—some insureds may be forced into higher retention structures simply because of pure economics. »It is important that organizations review third-party/lender requirements to understand what their obligations are and the impact increased retentions or retained risk may have with those relationships. Selective underwriting 2 Address data quality and utilize a robust asset valuation methodology. practices can present Expect even greater scrutiny to be placed on valuations moving forward with many underwriters automatically increasing values by 15%–20% on top of rate increases. The upside is organizations will more likely avoid underinsurance concerns when surprises in this challenging insurers enforce replacement cost values but you also don’t want to buy more insurance than needed. Every organization property marketplace. should review its current values (at least annually) and be prepared to explain the valuation methodology used. »Insurers are pressing for higher insurance-to-value interruption values with renewed interest to understand Every risk is di昀昀erent and comes with its own using their in-house and/or outsourced appraisal models the impact on a per location basis. We continue to see unique challenges. MMA is here to help you due to historical under valuations coupled with in昀氀ation, requests for insureds to complete business interruption through these challenges and uncertainties. Here supply chain, cost of labor, and material price increases. worksheets prior to quoting and binding coverage, and are some examples of how your organization can »Accurate valuations are truly a moving target due to we expect this trend to continue. Determine if you need demonstrate superior risk attributes to manage to increase business interruption limits knowing there are costs. Every step you can take toward making the current demand on appraisal 昀椀rms, as well as the complications associated with the supply chain and delays insurers comfortable with underwriting your risk requirements to appraise unique equipment—the latter with rebuilding in a timely manner when losses occur. can reduce costs in the long run. being an area in which few appraisers have experience. »Special attention needs to be paid to occurrence limit of »Insurers are over-correcting. It’s critical to bring forth liability endorsements. They have the potential to limit the a robust methodology on asset valuation in order to provide as much directional data to insurers as possible. indemnity to the reported value of each asset (i.e., building, »In addition to the proper building and equipment contents, and equipment) at each reported location. These valuations, insurers also remain focused on business indemnity clauses are limitations to the coverage and should be removed completely where possible.