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Insurance Industry Q3 Outlook

Insurance is designed to help protect what matters most. Farmers and agribusiness owners are up against a unique set of risks and challenges – from market volatility to extreme weather to rising costs and labor shortages, it can be difficult for any operation to plan for.
 
From an insurance perspective, we are in the middle of what is called a hard market: rates are increasing and coverage options are decreasing. A multitude of things have caused this disruption including weather and investment income.
 
In the healthcare market, costs are driven by the price of healthcare services and utilization, or how many services are being used. This market has been plagued by sharp peaks and valleys over the last four years. The pandemic resulted in decreased demand in 2020 and 2021 as consumers were opting out of routine services and elective procedures, which led to a sharp increase in 2022. This year is back on pace with normal utilization trends at around a 10% increase year over year. Insurance policy deductibles continue to trend high as consumers are coupling health plans with saving accounts to help manage out-of-pocket expenses.

Coming out of healthcare reform in 2014, the individual health insurance market was very volatile as consumers and health carriers were navigating the new landscape. Carriers were developing tighter networks, increasing deductibles and even pulling out of markets. Consumers were trying to understand the different plan options, eligibility and costs. The individual market has stabilized over the last couple of years and is more consistent. The small employer group market has remained consistent, and we continue to see 10-15% premium rate increases each year.

Because of continued cost increases in healthcare, Associated Health Plans (AHPs) which allow small employers to pool together in a large group insurance plan have continued to gain traction. The ASA team is currently working to launch an AHP in Kansas and Texas, in conjunction with a pricing solution, to help alleviate the double-digit premium increases. This solution is called reference-based pricing and can help farms and agribusinesses see 15–25% savings on their health insurance premiums.

With current market conditions, we have doubled down with more boots on the ground than ever before – with agents across the country, our staff is hyper-focused on finding options and building relationships with companies that have products for our industry. Our team can help evaluate current coverage, provide alternative options, loss control measures and safe farm training, all to help control costs. If an accident were to happen, we take a hands-on approach to claims management with practices to help drive injury costs down and help put things back together. Our on-farm service can make a difference in this marketplace.
 
Being an exclusive agriculture insurance provider, we pull from personal experience and a deep understanding of the industry – studying risks, claims, regulations, government relations and healthcare policies. We put all our efforts into developing the best solutions to help you manage risks, recover from losses and keep your operation going.

We believe higher rates will continue for the rest of 2023. The effects will vary across states, and with our localized approach, we can analyze individual market nuances and provide local solutions.  
 
To learn more about your options and ensure you are properly covered, contact us at
1-877-466-9089