Since the pandemic, there have been lots of challenges for businesses to overcome, with increasing costs the latest. Planning ahead cannot alleviate all challenges, but can at least give you time to better prepare to deal with them.

3 months into 2022, and we’re already seeing some themes in the insurance world that show no sign of going away, that have the potential to impact on your next renewal.

Key themes:

The FCA pricing reform has an impact mainly on personal insurance, where dual pricing has been outlawed for house and car insurance. The likely immediate impact of this will be on the very bottom end of the car and household market where risks were being bought at a loss by some insurers, with the hope of retaining clients long enough to make this back with sometimes substantial increases at renewal. There is likely to be a ripple impact felt across the market as some businesses adapt their costing models.

In a ‘hard market’, there is a high demand for insurance coverage and a reduced number of suppliers. This leads to increased premiums, and to insurers being less likely to negotiate terms, making it more difficult and time consuming for businesses to secure cover.

Labour shortages and materials costs have been driving a sometimes very significant increase in buildings repairs and rebuild costs. We’re also seeing the impact of parts shortages on car claims and the length (and therefore also cost) that these take to resolve. Increased claims costs inevitably lead to increased premiums, so it is a sign that the current conditions will be here for some time.

The pace of recognising any changes in the insurance world can be glacial. Insurance by its very nature is about understanding risk, which makes risks difficult to understand where there isn’t decades worth of data to refer to. An obvious example is electric vehicles and the strides being made toward autonomous vehicles. We don’t expect this to change, but there are signs of more markets starting to offer terms on electric vehicles.

A growing number of consumers are interested in how ethical, sustainable and green their insurance company’s investments are. We’ve seen this with banks and in pensions, where an increasing amount of people are recognising that they can exert pressure on large institutions by choosing more carefully where their money is invested. Given that insurers make much of their money from investing the premiums they hold, we might start to see this seep into general insurance in time.

Some insurers have really struggled to adapt to the remote working conditions of the past couple of years, with a significant impact on service levels. As a broker, we will always try to shield our clients from this as much as possible, but this has been increasingly challenging at times. There are early signs of improvement which we hope will continue throughout 2022.

There is an increased risk of cyberattacks and the UK Government is urging businesses to bolster their cyber security. The concern is that the events in Ukraine heighten the risks. Any cyberattack will have a widespread impact beyond its borders and Russia may look to target those in countries who are sympathetic toward Ukraine.

For most, particularly in this current economic environment, the price will be an understandable focus. So we’ve also included some practical tips for keeping your premiums down.

1. Review your risks

Reviewing your business risk profile with your broker or insurer annually is always a good idea, and it will be even more important in the coming years. It allows you to understand how your business has changed over the last 12 months, how those changes have impacted your risk profile and what you can do to mitigate some of those risks.

Gap analysis

You may find it beneficial to do a gap analysis to ensure you’re not paying for cover that you don’t need and that any new cover that you do require is tailored to your business needs. This will help you identify where these gaps exist so that you can make any changes and notify your insurer in good time.

We’d recommend engaging with a broker to make this process a little easier on you.

2. Shop around

With premiums rising and terms becoming stricter, it’s possible that your current insurer isn’t offering you the best deal out there anymore. If this is the case, it’s time to find a new provider who can find you the right cover at the right price.

The most important thing to prioritise when shopping around is the quality of cover. Ultimately, that’s what you’re paying for at the end of the day so making sure that it’s tailored to your needs is crucial.

In our experience, the best deals are usually a phone call away or sometimes discussed in-person over a cup of tea or coffee!

3. Engage with your provider early

Don’t wait until your insurance provider gets in touch with you. Some providers are better than others at giving adequate notice and some brokers will work to get you a good deal before even reaching out to you.

But don’t just assume that your insurer will be working on getting good terms. Apply some pressure and ask for timelines at least a month before your policy is due.

Be sure to notify your provider of any changes as soon as possible.

4. Review your policy

It’s important to remember that policies sometimes need to change as your business does. Each year, premiums fluctuate depending on your risk level and claim history. If you’ve made a claim recently, your premium is more likely to increase.

So it pays to review your business insurance policy regularly with your broker or insurer to understand what factors may be influencing your premium and see if there are ways for you to reduce it.

If you would like any help reviewing your existing insurance policy we can offer you a free review of your existing insurance policy. Our review aims to ensure that you’re getting the most out of your insurance.

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Get a free review of your existing insurance. We’ll get to know what cover you require and whether your current policy is offering good value for money. There’ll be no hard sell, just independent advice.

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5. Share your current renewal price

Many businesses are hesitant to provide their new insurance provider with a target premium due to fears that it might work against them. From an insurers point of view, the current renewal premium is a quick way of gauging whether or not they will be able to be competitive. So in a hard market, where insurance underwriters are seeing a lot of presentations and only have so much capacity (both in terms of time and financially), sharing as much information as you can about your existing renewal is going to benefit you. Presentations to insurers without a target premium run the risk of not being prioritised.

6. Use an insurance broker

Insurance brokers work with lots of different insurers, meaning that they can shop around on your behalf to find the best policy for your business. If a policy is priced too high and one insurer is unwilling to negotiate, the broker can seek out other options.

While there are many benefits to using an insurance broker, in the current market, they are even more valuable. By using a broker you could save hours of time, as well as money and stress.

A word of caution here though, if you’re engaging with multiple brokers this can have a negative impact. The reason being is that if an insurer starts to see the same presentation, they may view the risk less favourably. So we’d always recommend being open with your broker.

Next steps

When it comes to business insurance the risks are diverse. As such you need a policy that is tailored to your specific risks. And in an industry with lots of jargon and small print, it can be difficult to do this yourself.

This is where using an insurance broker can be a no brainer. The insurance sector has seen a period of considerable change in recent years. The result has been a period of consolidation meaning that an independent broker is even more difficult to come by.

Insurance is often a grudge purchase, but if you choose the right broker it doesn’t have to be. Any good broker should take the time to explain the cover in a way you understand, so you know exactly what’s covered and how it benefits you.

We’re ready to help!

At Jukes Insurance Brokers, we’re an independent, multi-award-winning insurance brokers. Our friendly team will work with you to find you a policy that is right for your needs. Simply let us know your renewal date or what insurance cover you require and we’ll go about getting you a free no-obligation quote.

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Published On: April 5th, 2022 / Last Updated: April 6th, 2022 /

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