Cost of Reinsurance
Reinsurance companies, which insure insurance companies, have increased their rates significantly in recent years, as the risks of catastrophic claims and other large-scale events have risen. Since insurance companies rely on reinsurance to protect their bottom line, they pass on some of the additional reinsurance costs to policyholders.
Change in Demographics
Insurance rates are also affected by shifts in demographics, such as the aging of the population. This demographic change has led to a rise in health care costs, as older individuals tend to require more medical care. Additionally, the increasing number of drivers on the road has led to more accidents and claims.