Premiums fluctuate according to hard and soft markets. Yet, there are many other crucial factors affecting directly the way insurance companies decide upon their yearly rates. These factors include:

- Uninsured Cost: There are many catastrophes that are not insured in their majority. For example the Toholu earthquake in Japan in 2011 had only 10% of insured value comparing to the total value of economic damages. Such uninsured events rarely affect global insurance premiums.

- Catastrophe Cover: These affect directly premium increase according to their size, exposure and the increased population.

- Claims Cost Inflation: We live in a 'compensation culture' with greater propensity to claim. People live longer due to advances in medical services and their relative cost increase. Legal cost are also on inflation.

- Insurance Asset Reserves and Investments: The volatility in values of equities and bonds held by insurers as investment affect greatly premium increase.

- High Risk Management Activities: Risk management awareness is affecting positively premium decrease.

- Availability of Capital: The more available capital the market has to offer, premiums are prone to decrease.

- Oversupply of Insurance Capacity: When insurance capacity increases, it tends to lower premiums to attract growth.

- Insurer Risk Management: The greater technical expertise by insurers on the actuarial level as well as catastrophe risk modelling, the better premiums are prone to decrease. Lately, insurers are more conservative in their investment strategy, therefore, premiums increase is controlled and not directly related to equities value and returns volatility.

Here at the hub, we make sure to explain to our clients these factors, to be able to forecast insurance cost and together find the best ways to apply efficiently the optimum risk management solution.