2022 Q1 started strong but as we close out Q2 we are beginning to see pullback and business cutting costs. The biggest myth of recession markets is that insurance costs decrease during down periods. Drivers of high insurance usually do not correlate with down markets. Natural disasters do not stop during recessions.
4 Risks that come in during a recession:
- Cyber-Security: 2008 cyber crime increased by 33%. While businesses look to cut spending, many are left vulnerable in IT teams, which leads to neglected parts of the business. Cyber-security should become at the forefront focus during this time.
- Increase in Workplace Injuries Post Recession: A smaller workforce is common during recession periods. When companies begin to expand again and hire, companies see a sharp rise in claims due to new employees being inexperienced and lacking sufficient supervision.
- Increase in Employment-Related Lawsuits: Negligence remains higher during times of low-level staff, which often means many work-related issues increase. Wrongful termination and sexual harassment are a few that have been seen to increase during this time.
- Mental Health Impact on the Workforce: 75% of individuals nationwide are feeling stressed by the current effects of the economy and post-pandemic. Work satisfaction has become a major theme in retaining good talent. Focusing on the right employees will be crucial throughout a recession.
What are insurance premiums doing now?