Strategies to Mitigate Impacts of the Hard Market

JANUARY 19, 2021

The commercial property and casualty (P&C) insurance industry faces the most sustained hard insurance market since the mid-1980s.

According to USI Insurance Services’ 2020-2021 Commercial P&C Market Outlook, Q4 Update, higher premiums, reduced capacity, more disciplined underwriting practices, and more restrictive terms and conditions are impacting many business sectors. Coupled with the latest challenges of 2020 including the COVID-19 pandemic, natural disasters, civil unrest, and damaging cyber events, conditions are expected to continue through 2021.

To mitigate the effects, businesses interested in buying or renewing insurance coverage are advised to develop and implement a clearly defined, comprehensive risk management plan. Strategies may include:

  • Preparing for renewal at least 150 days in advance. This includes engaging in early discussions with incumbents and new markets to get a preliminary understanding of options, capacity, limits, retentions, coverage and cost.
  • Reviewing new or existing policy language carefully, including terms, conditions, limits and exclusions (such as infectious disease exclusions), to ensure that the intent and wording are clear and that all loss exposures are addressed.
  • Identifying any steps taken by the business to mitigate risks, improve safety, or otherwise reduce claims and losses. These actions are looked upon favorably by carriers and should be presented and featured during the submission process.
  • Developing an impactful underwriting submission that highlights the business’s strong or improving safety culture and risk management approach.

Risk mitigation plans can also include strategies that address cashflow and liquidity problems related to the hard market. These may include alternative program structures (e.g., group captives) that enable businesses to assume more risk. These alternative structures should be evaluated carefully through a detailed cost-benefit analysis and other data-driven methods.

USI at Your Service

In the current hard market environment, many businesses are simply unable to invest the time, energy, and resources required to construct and implement a thoughtful risk mitigation plan. If you need support in developing a risk mitigation plan for your business, USI can help.

Through active engagement with USI, you receive the expertise and guidance needed to develop a comprehensive plan that includes strategies tailored to your unique business exposures. Whether you are purchasing or renewing coverage, we leverage our long-standing industry expertise, national reach, proprietary analytics, and time-driven modeling tools, to achieve the best possible outcome and timelines.

Our risk management specialists work with you and your team one-on-one. We assist you in identifying ways to mitigate your company’s cost of risk, improve your overall risk quality, and present your risk to the market in the best possible light. These strategies help you achieve a favorable renewal outcome and will generally include:

  • Reviewing existing exposures, program options and limits, and retention opportunities
  • Evaluating claim inventory, claim reduction efforts, and other risk control strategies and enhancements
  • Determining program design and pricing requirements
  • Evaluating market options aligned with your industry and risk appetite
  • Establishing the “ask” of the marketplace in terms of pricing and coverage and advocating on your behalf

To learn more about how USI can help your business mitigate impacts of the hard market, contact your USI representative or email  For COVID-19 resources and materials that can be useful in risk management planning, visit our Public Health Emergencies site.

Our Solutions At a Glance

Specialized Risk Analysis and Mitigation Programs Available Through USI

Analyzing and Designing a Cost-Effective Risk Financing Program

USI designs a risk financing program consistent with clients’ risk profiles, appetites, and financial positions. Through our detailed analytical process, the projected program costs are modeled under each risk financing option. This allows clients to make informed buying decisions and encourages an appropriate and effective balance between cost of risk and program control.

Targeted Risk Control Advocacy Based on Claims Review Results

USI integrates claims management, risk control and analytics through one seamless process to achieve a targeted risk control plan. This customized plan enables clients to identify adverse loss trends and take corrective actions that mitigate claims and program costs. Clients can achieve measurable loss improvement and continuous program savings through USI’s process.