Within the last week I received my health insurance plan 2025 rates and I also paid the property and casualty insurance on my lake cabin.  The health insurance premium was up 7.4% and my P&C cabin insurance also took a hike.  I also was at a funeral home seminar where I heard a commercial insurance agent tell all of us in attendance to expect commercial rate increases on our funeral homes in 2025.

It’s also no secret that property insurers are having more than ordinary claims due to weather incidents in Florida and other Southern and Southeastern states.

And, just to put some icing on the “rising costs” cake I noticed this recent article from CFO titled “Budgets for base salaries expected to soar again in 2025″.

So, even though we have had cumulative inflation of about 21.4% since the pandemic began in 2020, it also looks like some of the delayed costs that are associated with “historical results” such as insurance performance are now expected to continue that rise. . . and it may be that the rise in future premiums is no small number simply because of the recent history of losses in the insurance sectors.

Tom Anderson
Funeral Director Daily

In the funeral home business where most of the costs of doing business are fixed costs these increases eventually lower your margins and give you less money for other opportunities.

Couple that with the fact that many funeral home consumers may reach a Plimsol line of what they will pay for death care services and as your prices rise, they may choose to have fewer and less costly services.  That makes the rise of fixed costs, without great cost-containment efforts all the more crippling.

It’s important to note that your “Margins” are your Revenues minus your costs.  When it is difficult to raise revenues, such as times when lower-priced cremation keeps increasing in consumer choice, the best way to raise your margins is through cost-containment.  That does not simply mean to cut costs, but it calls for creative energy and thinking to look at other ways to do operational functions that may save costs — such as how you schedule staff.

In any regard, until one can get a handle on their costs I would use this time in the Fall of 2024 to take an itemized look at all of my expenses and try to imagine how I could do some things differently for 2025 that might reduce costs.  Being highly profitable takes effort and lots of thought. . . . I learned a lot by asking my staff for suggestions on how we could get more efficient. . . . and they usually pointed out really good suggestions that worked.

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