The term ‘’property and casualty’’ insurance, commonly abbreviated P&C, refers to several types of insurance meant to protect various institutions or personal property. Some of the common types of P&C insurance include homeowners’, car, renters’, power sport, and landlord insurance. There has been legislation introduced by the IRS to align the taxation of P&C insurance companies. The most well-known of these is section 831 {b} introduced by the IRS in 1986.
As any attorney who knows 831 b will attest, the section is used for both stock and mutual property and casualty insurance agencies. To qualify for taxation under this section, your net written premiums should be less than $2.2 million. Moreover, your primary function should be to avert losses from occurring through education and implementation of different safe practices that will decrease the chances of serious injuries and accidents.
These days, getting clients for your insurance is no mean feat. Consumers are now focused on quality, transparency, and service speed. You should thus change your operating model to reflect some of the top trends for P&C insurance. Here are some of your current model alternatives.
Usage Based Insurance
Also known as UBI, this model aims to align the driving behaviors of clients with the premium rates you are offering for car insurance. Driving behaviors and mileage are tracked using telematic devices that are integrated within the car’s equipment or are self-installed. As you monitor the client’s driving behavior, you can introduce various incentives that will boost safe driving. The UBI operation model has attracted an overall decrease of 40% in premiums for companies that have used it with maximum profits and significantly increased client numbers.
All Risks Insurance
This covers the losses that arise from all accidental causes other than those that are explicitly excluded in a policy. The all-risks insurance in this way differs from the named-perils one that covers only listed losses. Most consumers today are looking for hassle-free alternatives. An all-risk coverage will allow you to attract consumers that will find the option easier and cheaper compared to getting multiple covers for their assets.
Microinsurance Products
These are designed for low-income earners and individuals who cannot afford high premiums. Microinsurance is meant to compensate for death, injury and illness and covers low-value assets. It might not seem like something that will contribute much to your company’s bottom line. You should nonetheless remember that microinsurance products attract a higher client number compared to those with high premiums. This means when viewed cumulatively, the products will have high profits.
Peer-To-Peer Insurance
This denotes a risk-sharing network involving various like-minded insurers. Here, you will pool premiums with other insurers to minimize your risk. In peer-to-peer insurance, you also mitigate the conflict that arises with policyholders when insurers retain the dividends that are not paid as claims in a specific financial year.
You cannot afford to be stuck in the insurance marketing strategies of yesteryear and expect profits in today’s world. You are sure to get one or several trends from the above that will work wonders for your company depending on your products. The attorney you choose will help you pick the right strategies that will not decrease your profits or put you in the crosshairs of the law.