Why Insurance rates will go up in 2012

Unfortunately for small business owners insurance rates will go up in 2012. Why? Quite frankly insurance companies are losing money. Now they have been losing money on underwriting for sometime now, but have always managed to keep in the black because of investments and reserve releases to pad the bottom line. However these two "tools" to make income have not been good the last two quarters. Also bad underwriting is getting worse. Insurance company execs have to face the facts that they can no longer turn away from their core business , underwriting, and force rates up to adequately cover losses. Small business owners are stuck in a bad postion also. They have enjoyed the low rates but depended on the industry not to "knee jerk" them into major rate increases. Well , just how fast rates will climb remains to be seen, but either way change is here. Until next time be careful out there and know your risks.  K

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