The Fight for Price: Middle-Market Risks Shop Their Insurance Programs

Ballooning reinsurance costs, weather events resulting in claims and heightened property values are all contributing factors to rising property insurance premiums.

Source: By Shawn Leonard, Westfield Insurance | Published on September 15, 2023

Rising property insurance prices

Sticker shock: Middle-market commercial customers are all too familiar with it, especially for property and auto insurance programs.

Ballooning reinsurance costs, weather events resulting in claims and heightened property values are all contributing factors to rising property insurance premiums. The Council of Insurance Agents and Brokers (CIAB) reported commercial property premiums climbed 18.3% in Q2 2023, the highest of all lines of business measured.

In auto insurance, pressures include falling insurer earnings and a pandemic-related surge in claim severity. CIAB noted commercial auto premiums grew by 10.4% in Q2 2023, passing a milestone of 50 quarters of premium increases.

Bottom line: Middle-market customers (generally accounts of $75,000 premium and higher) are shopping their insurance in droves in 2023.

What’s an independent agent to do?

Well, there are at least three things:

  1. Communicate more thoroughly, and more often.
  2. Assist them with evaluating their insurance and risk program adequacy.
  3. Help optimize coverages and costs.


In a difficult environment for property and auto risks like today, agents should make communication a series of conversations starting early in the business cycle. Waiting until 60 days before renewal and communicating on a one-time basis can put these accounts at risk.

More frequent communication can serve the customer better. These discussions can reveal changes in operations, such as adding new locations or hiring new employees. Having conversations throughout the policy term can give the agent time to assess where the customer is currently and where they are going in their insurance program. It can also give the producer, customer and insurance carrier time to discuss alternatives and investigate viable options, and it helps eliminate the element of surprise.


In the current hard market, property rate pressures and tightening capacity mean agents may have to buy time to evaluate potential customer impacts much earlier in the renewal cycle. Accelerated communication can help accomplish that goal. The evaluation stage involves a thorough review of the current program and setting a shared plan for success moving forward.

Evaluating the current program provides a view of which lines of coverage account for the greatest insurance spend. (Presumably, property and auto coverage lines are among the highest cost drivers.) Through evaluation, the agent can help the customer determine whether their current program still meets their needs — and what changes need to be made to keep up with where they want to take their business.

Helping the customer evaluate their risk management and insurance program sounds simple, but it is even more relevant in a period of rising costs and at a time when middle-market customers are recovering from significant challenges economically. The agent’s role is to help the customer align its insurance program with their industry and customize the individual coverage lines of their program. In this regard, an agent’s industry specialization and experience are uniquely valuable.

A strong partnership among the producer, customer and underwriter opens the door to finding the right risk prevention resources and fitting them into a competitive insurance program.

This process includes validating coverage limits so that the overall program structure is adequate and adjusted for the effects of inflation, changes in operations and other pressures. Another step is checking whether current deductibles are still appropriate for the size of their operation.


Optimization is distinct from the knee-jerk reaction of pulling back on coverages and increasing deductibles to save premium. Those can be relevant steps, but optimization is a broader approach that aligns the insurance program to the customer’s business objectives while being mindful of cost.

Agents who optimize their customers’ programs are providing a vital strategic service. I have seen many talented producers who are experts in their respective industry vertical take consultative approaches to help customers navigate the challenges of spiking costs and increased exposure to loss.

The optimization process should include finding ways to align the account with agency and carrier resources. Many of these resources are designed to create a culture of proactive (versus reactive) risk management.

Examples of resources for property risks are infrared testing of electrical systems, preventative equipment maintenance, and review of property protection systems. For larger auto programs, two significant opportunities that some accounts still have not evaluated as much as they should are deploying loss mitigation telematics within the auto fleet and modernizing their fleet safety program.

As a recent example of a large middle-market customer that had approached the marketplace for alternatives, we worked with the agent to conduct a thorough review of their exposures, which were changing due to a recent acquisition and expansion. The entire local team was at the table during these conversations: the agent, the local underwriter, the customer and the local risk control representative. We partnered with the agent and customer to update limits to meet current values, offer risk management alternatives that were customized to their needs, and engage a telematics program to heighten proactive driver risk avoidance behaviors. In addition, as part of the optimization process, the customer wanted to evaluate increased retentions based on their strong capital position, which ultimately helped mitigate overall program cost increases.

About the author

Shawn Leonard is Midwest Middle Market Leader at Westfield Insurance, responsible for Illinois, Indiana and Michigan.