2019 Market Trends and Other Frequently Asked Questions

2019 Market Trends and Other Frequently Asked Questions

We understand your clients may have questions regarding their premiums. Here are potential questions you may receive, talking points to help your team, and a two-page summary of trends impacting the industry.

Why did my premium increase?

Let's talk about what's happening in the market. Throughout North America, and even from a global perspective, several trends have afected many businesses with respect to their insurance premium. These include:

Increased frequency and severity of catastrophes1

Rising cost of goods and services

? Major events are occurring in geographies they previously haven't historically (fooding, tornadoes).

? In the last fve years, insurers have paid nearly $200 billion due to catastrophes. That is 80% more than the previous fve years.

? In the last three years, the annual average number of billiondollar disasters is more than double the long-term average. In 2018, there were 14 separate billion-dollar events.

? Cost of goods sold, including building materials, continues to increase.

? Tarifs are impacting the cost of materials, and as a result valuations should be increasing.

? Direct written premiums track Nominal GDP overall fairly closely; as businesses grow, expand, and invest, more insurance is required to protect them.

? Shortage of skilled labor is driving up the cost of resources.

Heightened auto risk

Rising severity of non-weather-related water losses

? More vehicles on the road, less experienced drivers, increased distracted driving, rising medical costs, and social infation that is leading to increasingly litigious environments.

? In 2015, water damage losses accounted for 21% of total losses, in 2018 that increased to 40%. The increase in claim count is up only slightly, so the increase is severity driven.

When disasters strike, some businesses fnd they do not have adequate coverage to rebuild, posing a threat to their operation. Since the fnancial risks and exposure to a major event have never been higher, we want to make sure you're adequately protected. Have you tried Chubb's Business Income Consultation Tool? In less than 5 minutes, we can do a quick calculation to ensure your business has adequate protection.

; U.S. 2014 - 2018 results

Am I paying more because of other major catastrophe events in other parts of the country?

In short, no. Chubb reviews the costs for the specifc state you're insured in and sets premiums for that state without considering catastrophe losses in other states. For example, wildfres in California don't make rates in New Hampshire increase. Each state is priced according to the risks of that geography and the national trends afecting everyone, such as the cost of lumber. In addition, rates are fled and approved by each state's regulators.

listing only those perils that are NOT covered by their policies. Additionally, Chubb enhanced their Customarq Package ofering with new, free coverages not typically ofered by competitors including:

? Product Withdrawal Expenses and Crisis Assistance Expenses endorsement with automatic limits of $50K

Let's take a deeper dive into coverage diferences between the various quotes I've provided you. One way we can manage your premium is to explore a range of deductible options. Would that be something you would be interested in pursuing?

Are there additional services from Chubb that I am not taking advantage of?

Chubb ofers a number of services that you can take advantage of, regardless of your business size. They ofer self-service risk engineering checklists, thought leadership, videos, and more. Qualifying businesses receive dedicated risk engineering services that include on-site inspections, recommendations, and other in-depth risk mitigation guidance. You can learn more about these tools on welcometochubb.

Why is Chubb's quote higher?

Chubb's products are generally the best in class with the broadest features and benefits. As an example, their proprietary forms have broader all-risk perils. What this means is that while many carriers list the covered perils, Chubb's insurance is broader,

Is Chubb still the best ft for me?

Chubb ofers tremendous value overall. They are a best-in-class insurance provider. That's why we recommended them from the start. Chubb has the most experience serving businesses of your caliber; they have the largest global claims network, and have a long track record of going above and beyond should you ever need to fle a claim. In fact, 96% of clients that submitted a claim with Chubb were highly satisfed with the outcome.

Chubb has been sharing a lot of information about recent trends in the marketplace and the new risks to businesses in your industry. Given all that is happening with respect to weather and rebuilding costs, we believe the fnancial risks have grown signifcantly and so we want to ensure we protect your business. We believe Chubb is the best option to help you run your business with confdence and peace of mind.

Key facts on Chubb

200+ year track record of paying fairly and fast and a market leading satisfaction rate--96% of clients that had a claim are highly satisfed.

Underwriters, risk engineering, and claims specialists dedicated to your industry, which means they are experts in the industry in which you do business and understand the risks you are most likely to face.

Broad features and benefts that many other carriers limit.

Dedicated claims teams and catastrophe response teams that deliver unparalleled service in the case of a major disaster.

One-stop shop with over 70 products--purchasing multiple lines from the same carrier may reduce gaps in insurance.

Cutting-edge risk engineering services to help you stay ahead.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at . Insurance provided by U.S.-based Chubb underwriting companies. All products may not be available in all states. Coverage is subject to the language of the policies as actually issued. The opinions and positions expressed in this presentation are those of the presenters, not necessarily those of the organizations they represent. The material presented in this presentation is not intended to provide legal or other expert advice as to any of the subjects mentioned, but rather is presented for general information only. Chubb, 202 Halls Mill Road, Whitehouse Station, NJ 08889

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