California’s insurance market is facing significant challenges, leaving brokers like Neera Sharma in a tough spot. As the president of Coastal Brokers Insurance Services, Sharma is witnessing firsthand the turmoil in the industry. With many insurance companies pulling out, brokers are struggling to find coverage for their clients.
Sharma describes the current situation as a “very, very challenging time for California.” She explains that many insurers are hesitant to offer policies, creating major headaches for brokers. The state’s FAIR Plan, originally intended as a last-resort option for high-risk properties, is now taking over large portions of the market. This shift is forcing private insurers out and leaving brokers with fewer options.
Many clients are now opting for the FAIR Plan for their property coverage, which means brokers like Sharma can only provide general liability coverage. “We’re not losing to another private insurer,” she points out. “We’re losing the business to the FAIR Plan.” This trend is concerning for brokers who rely on a diverse range of insurance products.
The retreat of insurers is largely due to increasing financial losses from wildfires, landslides, and earthquakes. In response, Sharma is focusing on innovation to keep coverage available. She is exploring new products that might exclude fire risks while still providing essential coverage. This creative approach involves working closely with carriers willing to consider new solutions.
Looking ahead to 2025, Sharma sees both challenges and opportunities. She aims to develop new products that address the gaps left by major carriers. This includes creating wrap products that combine business income and general liability coverage. Her strategy is to identify unmet needs in the market and tailor solutions for clients.
Sharma is also optimistic about potential economic shifts, particularly the return of some domestic manufacturing. She believes this could lead to new opportunities for coverage. However, she acknowledges that the road ahead will not be easy. The insurance market is becoming more complex, and the risks are persistent.
For brokers, adapting to these changes is crucial. Sharma emphasizes the importance of speed, product knowledge, and pricing. She believes that brokers must be proactive in communicating with clients and educating newcomers to the industry. “If you’re innovative and engaged, you’ll win,” she says.
As veteran brokers prepare to retire, Sharma sees a chance for younger professionals to embrace technology and learn quickly. She urges her peers to avoid complacency, as the market continues to shift. “It’s about survival,” she concludes. “We need to find the next solution because the old market isn’t coming back.”