Our sales team serves as a valuable resource to the rest of our company, providing strategic insights from the field and news on industry trends. This is certainly the case with Brian McAlpine, an Associate Vice President, Regional Sales Manager, now in his 11th year with Distinguished.
To stay on top of—and ahead of—changing market conditions, Brian often looks to California, one of the nation’s most diverse and economically powerful states, and one of our company’s top performing regions.
As we wrap up the first month of 2016, Brian offers four things to take with us throughout the first quarter.
1. The housing market is back for good. Nowhere has this been more apparent than in California. According to California Association of Realtors’ 2016 California Housing Market Forecast, home prices in the state increased more than 6.5 percent in 2015 over the prior year, and home sales 6.3 percent. “Housing starts” are up over 10 percent for the same time period. With tech business booming in places like the Bay Area, there is no reason to see a slowdown. Builder’s risk policies continue to be an engine of growth for many of our clients, a trend that should only continue in 2016.
2. The market indicates that it will continue to soften in the New Year. This is primarily due to low loss ratios across the commercial insurance market, especially as it relates to CAT losses. Increased competition and greater investment in technology will both continue to have a negative impact on rate.
3. Changing interest rates will affect the insurance industry, which could produce a further softening of the market. A rise in interest rates can provide P&C carriers with additional capital through better returns on their invested reserves. Should insurance carriers choose to reinvest their extra revenue back into the insurance marketplace, we may see increased competition as carriers enter new arenas or deploy aggressive pricing in an attempt to acquire market share.
4. The years 2013 to 2015 saw a large number of mergers and acquisitions in the insurance world. All signs point to this as a continuing trend due to strong economic conditions and an abundance of excess investment capital.
Stay tuned for more insights from the field, sourced from our sales team members across the country.