In Louisiana, property premiums didn’t just rise – they exploded.
“Our property rates skyrocketed, tripled, quadrupled in some cases,” said Zachary Fanberg (pictured), managing director at Eagan Insurance. Hurricane Ida in 2021 may have been the breaking point, but years of storm activity had already stretched the region’s insurance market to the brink.
“In some ways, it was more of a wind event… than Hurricane Katrina was,” he said. “Katrina was more about flooding. Ida was about wind.”
The damage revealed significant flaws in how insurers were valuing buildings. In response, carriers imposed steep hikes not only in premium rates but also in property valuations.
“We may have had a frame habitational condo insured at $85 a square foot,” Fanberg said. “At renewal, the carrier came back and said, ‘We need to be at a minimum of $115 a square foot.’”
It wasn’t just rates going up – it was everything. “That was the double whammy,” he said. “Price rate increases and the value increasing, which drove those prices to astronomical levels.”
Higher values also meant higher deductibles. Fanberg noted that insurers who previously offered 1% to 2% named storm deductibles quickly shifted to 5% across the board.
“Not only were you getting hit with the rate increase and the value increase, but your deductible structure skyrocketed as well,” Fanberg said.
Clients faced difficult choices. “Do we want to explore wind deductible buy downs, which would just continue to add to the cost?” he said. “Or are we just going to move forward with a much higher deductible at that much higher rate?”
Some opted out of wind coverage entirely. “I’ve had a number of customers who had to make that tough decision.”
On top of that, carrier appetite collapsed. “The number of companies willing to be a primary property carrier went down significantly,” Fanberg said. “Some said, ‘We’ll offer a quote, but we don’t want to be primary. We’ll attach at $5 million or $10 million.’”
Layered placements became the norm, pushing costs higher again. “Someone who was giving us $30 million on a property schedule was now only giving us $5 million – and at a higher rate,” he said.
After years of volatility, signs of relief finally arrived.
“I’d say probably back to October or November of 2024 is really when we saw a drastic shift in the property market,” Fanberg said. “In some cases, I’ve heard it referred to as a falling knife right now in the property rates.”
He reported average reductions of 25% to 40%, with some rates halved compared to 2021-22 peaks.
Still, Fanberg doesn’t expect a return to pre-Ida pricing. “It’s still not back to where it was prior to all those storms… and it never will be,” he said.
Even so, the correction has opened doors. “Maybe you want to buy more wind now that the rates are coming down,” he said. “Maybe you want to buy that wind deductible buy down from a 5% to a 2%.”
Fanberg stressed that in a market this complex, brokerage requires more than shopping rates.
“As an insurance agent that does a lot of commercial property in this region, I try to sell my clients’ buildings to the brokers,” he said. “How does our client’s building stand out? Are they sprinklered? When was the roof last done?”
Most property in the Gulf is placed through surplus lines carriers, making broker relationships critical.
“We know where to go. We know who to use for various types of construction, various types of buildings, businesses,” Fanberg said. “Our partners trust the information we’re giving them.”
To make deals work, his team builds detailed submissions – underwriting packages that make it easy for carriers to say yes.
Analytics also play a growing role. Fanberg said his team often uses probable maximum loss (PML) modeling to help clients determine what level of wind coverage they actually need.
“If we have a customer who has a large, valued schedule of $100 million… maybe they don’t need $100 million of wind,” he said. “Maybe it makes more sense for them to do a wind loss limit based on the data… maybe it’s $25 million, maybe it’s $10 million – it depends on the insured.”
The modeling helps clients avoid overpaying for coverage they’re unlikely to use – without leaving themselves exposed.
“You can do that for other perils too, but for wind, it’s critical here,” he said.
