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In the past several weeks, Arkansas Business has published several articles and an Executive Q&A with Scott Dorminy, an owner of insurance agencies in Arkansas and state president of the National Association of Insurance and Financial Advisors, on insurance trends in the state.
The big trend? Premiums are rising and will continue to rise. That’s because losses are rising. Commercial property insurers’ pure direct loss ratio in Arkansas last year was nearly 127%, up from 120% in 2022 and 81.2% in 2021, according to the Arkansas Department of Insurance.
As Andrew Meadors, CEO of Sunstar Insurance Group’s Arkansas and Tennessee markets, told our Kyle Massey, “It is the most difficult market to place business with in my 38 years” in the industry.
Why are losses rising? Wildfires and hurricanes, of course, but in places like Arkansas severe convective storms are wreaking havoc.
What’s a business owner to do? Insurance industry experts recommend focusing on loss reduction. That means owners should consider weather-proofing their property as much as possible, building storm shelters and, where possible, spreading operations across multiple sites.
It also means building a financial safety net, shopping around for coverage and thinking twice about raising deductibles.
Hope is a beautiful thing, but it’s not a strategy.
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