Ep. 487 A Hardening Insurance Market for Non-Profits-Steps to Prepare for the 2025 Renewal Process

Rancho Mesa's Alyssa Burley and Vice President of the Human Services Group Sam Brown talk about the hardening insurance market for non-profit organizations and how to prepare for the 2025 renewal process.

Show Notes: ⁠⁠⁠⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠⁠⁠⁠

Director/Host: ⁠⁠⁠⁠⁠Alyssa Burley⁠⁠⁠⁠⁠

Guest: ⁠⁠⁠⁠⁠Sam Brown⁠⁠⁠⁠⁠

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2025. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.

I’m your host, Alyssa Burley, and today I’m joined by Sam Brown, Vice President of the Human Services Group with Rancho Mesa. And, we’re going to talk about the hardening insurance market for non-profit organizations and how to prepare for the 2025 renewal process.

Sam, welcome to the show.

Sam Brown: Thanks for having me. Always good to be back.

AB: Now, you work with a lot of non-profit organizations helping them manage their risk profiles. And, you’ve got your finger on the pulse of the insurance marketplace. Now as you’re working with these clients prepare for their renewals, what is the conversation that you’re having with them about the state of the insurance marketplace? 

SB: Yeah, ever-changing. My non-profit and human services leaders and organizations started experiencing a hardening property and casualty insurance market probably three years ago and continuing into 2024. But they were prepared for it because we’ve been discussing the changes in the market which are typically illustrated by reduced limits of liability, higher deductibles, and increased premiums.

AB: Alright, so, the market started hardening a few years ago and you’re not expecting it to soften any time soon, right?

SB: That’s correct. According to Insurancebusinessmag.com, reinsurers are seeking double digit rate increases in 2025 due to rising claim costs. Now, behind these rising claims costs are social inflation, emerging risks, such as the opioid and synthetic chemicals that we see out there, reserve increases, litigation funding and of course no promising tort reform on the horizon.

So what that all spells out to is that reinsurers argue that 2024 rate hikes were insufficient. As a result, these companies are reducing exposure to the U.S. casualty market.

And as someone once told me, when reinsurers sneeze, the insurance market and its insurers catch a cold. So in 2025, we can expect more signs of a hardening market.

AB: I like that analogy. So, what are you recommending your clients do to prepare for their 2025 renewals?

SB: First, I would anticipate and budget for premium increases. Our clients should consider the organization’s growth in all rating factors, whether it be revenue, employee count, vehicles, or beds if it’s a shelter. Premiums will increase accordingly before any rate increases.

Next, complete full insurance applications. So an experienced insurance agent will ask clients to update applications every renewal; that’s either going to be in hard copy, or using electronic documents, or via an online portal like Rancho Mesa does. If this is not happening, the policy holder needs to ask why or why not. If it is happening, then my recommendation is to complete the full version of the insurance application, rather than truncated, shorter renewal applications. Creating competition in the marketplace means providing underwriters a full scope and understanding of operations. Very few underwriters will quote competitively using another carrier’s renewal updates that you might see.

Next, review contract insurance requirements. I say this because many carriers are reducing limits of liability for abuse and molestation as well as professional liability. Other carriers will no longer quote umbrella or excess liability. So that means stacking quotes from various carriers to achieve once readily attainable limits is necessary, and it is possible, but this strategy comes with a significant premium cost. So, before stacking policies, review contracts with your counties, your regional centers, and your funders to understand the required insurance coverage.

Finally, I would say engage with your agency partners, now. So, communicate. If you’re a subcontractor communicate to your partner organizations, the cost to maintain required insurance limits. Take a hard look at current programs to determine if outcomes meaning the revenue that you're generating from that contract or simply the impact you're having on the community warrants the increased insurance costs. Some programs may need to maybe sunset, go away, wind down. Just cease to exist.

AB: Yeah, if it just doesn’t make sense.

SB: Correct, yeah. So, a continuing hardening insurance market in 2025 will force non-profit and human services leaders to approach the renewal process with care and new focus. The recommendations that we listed will help organization leaders develop a renewal strategy while helping underwriters’ I would say analyze prior to releasing quotes.

AB: That’s all really good advice. I’m sure your clients appreciate all that guidance.

Now, Sam, if listeners have questions about preparing for their upcoming renewal, what’s the best way to get in touch with you?

SB: I can be reached by phone at (619) 937-0175 or email at sbrown@ranchomesa.com

AB: Sam, thanks for joining me in StudioOne™.

SB: Yeah, thanks for having me.

AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.