Economic challenges and inflation have affected 81% of companies’ ability to secure enough insurance coverage, according to Hub International’s North American Outlook Report 2025.
What’s more, 73% of companies report being underinsured against “profit-threatening risks.” This is only a 3% improvement from 2023’s Outlook Report.
Specifically, commercial coverage for property, general liability and umbrella insurance have all decreased when compared to 2023. A further 63% say their property insurance is a “traditional model,” where they obtain coverage through a single carrier.
Availability of insurance is under pressure across numerous industries, says Hub. “[This] underscores the critical role of insurance as a strategic tool for mitigating the financial impact of both familiar and emerging risks.”
With companies experiencing increased pressure on insurance costs, thanks to economic insecurity and inflationary effects, many might find their situations ripe for alternative risk transfer solutions.
“When traditional insurance coverage isn’t available at an affordable cost, organizations need to explore other coverage options to protect their bottom line, company reputation and people,” the report reads. “These alternative solutions may include captives and parametric insurance.”
But companies should also develop strategies to better use data and analytics.
Thus far, says Hub, only 39% of companies say analytics is extremely important and 27% say it’s significantly important to the way their property insurance is financed and structured.
Plus, 96% of companies don’t have formal processes for identifying and obtaining their annually reported property values and exposures.
To better respond to their risks, secure coverage and serve their own sectors, business leaders should massively accelerate “the use of data and analytics to manage insurance costs, enhance employee benefits and [make business predictions],” the report says.
In a volatile market environment, risk management can help businesses better secure coverage and mitigate their biggest risks.
Per the report, the majority (62%) say their organizations have implemented formal enterprise risk management processes and assessments.
That’s also a place where specialized commercial brokers can step in.
“Underwriters give preferential treatment to brokers who have lower than average loss ratios on their book of business because it signals a commitment to risk management,” the report says.
Feature image by iStock.com/kadirkaba
