CAPE MAY – A resolution to renew Cape May’s membership in the Atlantic County Municipal Joint Insurance Fund (JIF) passed without a problem. What was notable about this seemingly routine action was in the presentation by Kamini Patel, a JIF pooling administrator.
Patel spoke of a “hardening” of the insurance market due to the combined impacts of climate change, high inflation, and regulatory changes. She said the insurance market is showing a trend toward “less coverage for higher prices.”
Noting that the industry is limiting its own capacity, Patel cited the fact that there have been 18 separate $1 billion or more loss events in the U.S. since 2022.
“That’s one every three weeks,” she said.
The Insurance Risk Management Institute defines a hard insurance market as one where premiums increase and capacity (the supply of insurance coverage to meet demand) decreases. In short, insurance becomes more expensive and harder to obtain.
Patel went on to demonstrate the financial strength of the JIF. She enumerated the many JIF programs that help reduce losses, including a wellness campaign that is premised on data showing healthy employees are injured less frequently and return to work sooner. Her presentation was strong and there was never any doubt that the city would renew its membership.
Oddly though, the presentation on the strength of the JIF did not bring as much comfort as it might have in past years. Patel’s comments on the insurance market, as a whole, and the pressures on the reinsurance market, in particular, were cause for reflection and even concern.
Coupling her remarks with recent actions by major insurance carriers to exit property coverage markets in select areas of the country because of repeated high loss events and with rising rates for basic homeowner policies gives a glimpse of potential challenges that may be hitting towns and individual homeowners in the near future.
