The varied manufacturing base in the U.S. continues to grow and, while the industry as a whole has a lot in common, each segment has its own challenges and successes.
The Manufacturing Benchmark Report by Assurex, a partner of Unison Risk Advisors, found the following trends among the more than 1,300 companies represented in the survey.
- Property rates tend to decrease as property values increase.
- Property deductibles increased with the total insured value.
- Larger organizations tended to buy higher excess liability limits.
- The cost per $1 million of excess liability policies increased with the amount of revenue.
As expected, there was significant variability in the relationship between revenue and property values, but it differed by business specialty.
Of those who participated in the survey, 58% were in furniture/woodworking, machinery/equipment and metal goods manufacturing. Due to their significant representation in the results, more details are provided in the report.
Furniture/Woodworking
Much of the data gathered met our expectations, but there were some unexpected twists.
- Excess liability limits were smaller than other types of manufacturers.
- In general, excess liability limits increased with revenue, but some large furniture/wood manufacturers had relatively low limits.
- These manufacturers had higher property rates and significantly lower general liability rates.
Machinery/Equipment
Overall, manufacturers of machinery and equipment have a greater need for insurance than those in other specialties. Our report found that:
- This sector tends to buy larger property limits, which also increased over last year.
- They purchase excess liability limits up to $5 million.
- They are more likely to buy coverage for international exposures.
Metal Goods
Manufacturers of metal goods showed some interesting trends this year.
- About two-thirds (68%) purchase only up to $5 million in excess liability coverage, even as such limits often increase with revenue.
- They have lower general and excess liability coverage than machinery and equipment.
- Property rates decreased over last year and are lower than other specialties.
While this report does not cover all aspects and trends within the manufacturing industry, it is intended to give buyers of insurance a general overview so they can make smarter decisions.
