Insurance is a service that touches every other industry. Changes in insurance fundamentals impact every business.

At the same time, a solvent, well-functioning insurance industry is a requirement for the success of every other business. Even prior to the turbulence of 2020, the insurance industry was facing challenging times resulting from social inflation, natural disasters, and an extended low-interest-rate environment.

Reinsurance (insurance for insurance companies) plays a major role in the health of the insurance ecosystem. The Willis Reinsurance Index, which tracks financial metrics of key reinsurers, shows a deteriorating story for the first half of 2020. Total capital decreased by 3.5%. Net income decreased by 85%, and the combined rate (measure of losses + expenses divided by premium) increased by 5.1% to over 100%. That drove the return on equity (ROE) to a negative 0.7%.

These results will lead to continued turbulent times as we move into 2021. We are excited to have Stu Henderson, CEO of Western National Insurance Company, join us on Ilume to share his thoughts on what this means to small and mid-sized businesses in the Upper Midwest, and what you can do to minimize the risks associated with insurance industry economics.

We discussed a wide range of subjects during our conversation, including basic insurance economics, rate impacts on key lines of business, impact of COVID, technology and underwriting changes, and his outlook for 2021. Most importantly, Stu shared some important tips for navigating the insurance industry in the coming year.

Join us soon and learn a bit about insurance economics, what to expect in 2021, and how to best navigate the upcoming impacts. Stay tuned!