There is high hope that 2021 will be a better year for restaurants than 2020, and with good reason. Some trends are now moving in the right direction and some market shifts appear close to their peak. Most importantly, many insurance carriers and restaurant owners are embracing a proactive approach to the challenges that remain, which helps to manage the risk of these unknowns.

At Lockton Affinity, the administrator of the RSCS Insurance Program, we strive to be knowledgeable advisors who are proactive, not reactive, to the ebb and flow of the market.

We are fortunate that many of our restaurant customers also take a proactive approach to coverage. Throughout a very eventful past year, the majority of franchise owners like you understand the importance of reviewing and retaining your business insurance coverage.

In this post, we share with you an inside look at some of the changes we are seeing in the market. We will also share the steps we are taking to meet these challenges and serve our customers.

Insurance Market Trends: Seizing an Opportunity

In general, insurers have faced a number of challenges, with some developing over a number of years, such as:

  • Rising claim severity
  • Frequent natural catastrophes
  • Persisting low interest rate environments
  • Steady price concessions lasting a full decade

The insurance market is also facing increasing attention from management and investors, who are challenging the status quo, seeking greater return and putting pressure on the old way of doing business.

It’s been an opportunity for insurance carriers to take action across the board on rate, limits and terms. Carriers have been proactive to manage rates, reduce limits and de-risk portfolios. While uncertainty and market conservatism will persist through 2021, we’ve also seen positive signs that increases for certain lines may have already peaked and will begin to decelerate.

Monitoring Insurance Market Trends

Like many of you, we have found that the last year’s challenges can have unequal impacts. As we monitor market trends, some unique challenges call for tailored solutions. Here is a snapshot of where we are:


The recent Texas winter storm caused 69 deaths, 44 hours of freezing temperatures and $18 billion in property damage.

The property market continues to be hit by losses from windstorm, hail, flood and wildfire perils. Underwriters are addressing the challenge by realizing these events are part of a new normal.


COVID-19 mitigation efforts, diminished economic activity and work-from-home trends created new realities for drivers and insurers.

While the results have not been beneficial for all, it has provided a favorable reduction in auto loss frequency for insurers, and there is a thought some of these improved trends could be permanent.

Workers’ Compensation

Safety first is a slogan that more and more people are taking to heart and it shows. Workers’ Compensation has been a favorable outlier in commercial lines of insurance as the most consistent segment over the last six years.

However, insurers are still monitoring developments with loss trends, interest rates, unemployment and workplace norms that could potentially impact customers.

Cyber Liability

If your delivery drivers had trouble filling up the tank recently, you know how important cyber security has become for businesses. A pipeline cyber attack that led to a fuel shortage is just one example of the board-level issues affecting insurers and their customers.

In 2020, COVID-19, economic uncertainty, cyberattacks and political divides accelerated trends in what was already a hardening market for insurers. Insurers are managing unexpected losses by rethinking the risks and exploring new options.

Eyeing Immediate Challenges

In addition to ongoing trends, we are also eyeing several immediate challenges facing today’s companies that have a potential to impact insurance for restaurants like yours.


For many, COVID-19 remains the key concern. Issues include class-action lawsuits related to business impact, misrepresentations to investors and failure to reimburse claims. Further risks include business bankruptcies and reopening litigation.

Recruitment and Retention

The labor force is undergoing a major shift, with some staying home and others pivoting to warehousing and delivery industries. Casualty and employment practices are potential risk areas with severe understaffing.

Diversity, Equality and Inclusion (DEI)

Diversity is a key challenge of 2021. Recent headlines claiming organizations are failing DEI objectives have put a spotlight on top companies, damaging brands and leading to class-action employment practices suits.

Cyber Security

All companies face a threat of frequent and severe cyber incidents. Directors of publicly traded companies can be held responsible for failure to institute proper corporate governance leading to share price drops from the negative publicity.

Environmental, Social and Corporate Governance

Sustainability issues such as climate change, water management, biodiversity degradation and other issues have the potential to impact supply chains, so a core focus for companies is on disclosure and internal risk management.


While the insurance market and restaurant industry are always changing, there is hope some trends are moving in the right direction for businesses like yours.

At Lockton Affinity, we are honored to serve you through these changes. Our advisors look forward to providing you the best coverage possible as we look to the future. If you have questions about your coverage, contact us and let us know how we can help.