Insurance in 2023 and You

At Branch, we like to say that we’re “getting back to getting each other’s back.” That’s what insurance is. Bringing people together to look out for one another. Contributing your share to build strength in numbers for your community. So when you’re the one who needs to call upon the community for assistance, you know they’ve got your back, too.

It’s all just as true today as it was in 1752, when Ben Franklin started an early American home insurance company. Communities came together to pool their money, letting neighbors help neighbors in their time of need. 

While Ben Franklin lived through some extraordinary times, so do we. Pandemic. Unrest. Inflation. Today, even as the world around us may change, at Branch, our fundamental purpose remains the same. We protect our community and the people who trust us to do what’s right with their money.  

In this post, we’ll explain the impact the macro forces disrupting so much of daily life have on how we keep our members covered. And how we think about our role in the Branch community.

Branch is a promise to get your back

When you “buy insurance,” you buy a promise — a promise that if something financially devastating happens to your home or your car, the money you put towards insurance will be enough to get things back on track. It’s what getting your back is all about. 

In states where Branch operates as a reciprocal exchange, the money you pay in premiums goes directly towards helping fellow members, like it would if you were the one in need. The premiums people pay aren’t our money. They’re our members’ money. We, at Branch, just manage the funds to make sure our community operates in its own best interests. Your best interest.

As responsible stewards of our community’s capital, we exist to do two things really well: 

1. Be as efficient as possible to keep our cost of doing business low, so we can pass those savings along to our members. 
2. Set prices as fairly as possible so that the total cash paid into the membership by all members is enough to cover the few unfortunate members’ claims in their times of need. 

For us, it’s about keeping promises. Not maximizing profits. That’s why we spend our days assessing risk, doing the math, and setting each price accurately and fairly to protect our members. 

So, how are insurance prices changing today?   

Across the insurance industry, prices go up and down over time based on how likely it is that more people will need to file a claim and how much it costs to fix a car or repair a home. Like anything you purchase, there are always factors that influence your insurance price beyond your control. Global macroeconomics. Consumer behavior. 

The truth is that lumber and used cars are a lot more expensive today than they were two years ago. Plus, staffing shortages are extending the time to make repairs and increasing the cost of labor. Factor all of that together with the simple reality that people are back to driving as much as they were before the pandemic (causing more accidents) and you have a recipe for increasing costs across the insurance industry. 

There’s no complete list or surefire way to predict the future. Insurance models rely on all kinds of the latest data to balance what you’ll pay in a premium vs. what you might need from a claim. But, if you are experiencing increases in your premiums — whether you’re a Branch member or just shopping around — hopefully this helps explain why.

Even when rates go up, Branch prices are built to be structurally lower.

At Branch, we’re not immune from the economics of insurance. We’re confronted with dynamics like the forces above as much as everybody else. However, we built Branch from the ground up to make saving money faster and simpler than ever before. Passing along the money we find in our efficiencies to keep your insurance premium as low as it can be, while still looking out for the entire community. 

So as we all work through these turbulent times — though your premiums may rise or fall — know that our mission is always to make insurance as affordable as possible. That’s this year, next year, every year.