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Why Are Global Commercial Insurance Prices Rising?

Why Are Global Commercial Insurance Prices Rising?

The insurance industry has seen increased prices on a global scale, with the largest recorded increase occurring in the second quarter of 2019. The 6% rise is the biggest since Marsh’s Global Insurance Market Index Surveys began in 2012.

Price rises worldwide

Whilst price rises have varied globally, there was a common theme. All of the major geographical regions saw increased pricing for the third consecutive quarter. These price rises included 5% for the United States, 6% in the UK, 4% in Asia and an enormous 18% for the Pacific. The next consideration is whether the types of insurance correlate and what is causing the continuous increases.

Which insurance types have seen the biggest increase?

Marsh’s survey revealed that the insurance price rises were greatest for financial and professional indemnity insurance at almost 10%. In addition, property premiums increased by 8% and casualty cover rose by 1%. Regardless of what level of cover is required, insurance quotes have risen continuously across all industries, regions and insurance types for almost two years. But what is causing them to rise?

What are the causes?

Over the last seven quarters, there has been a constant reduction in the marketplace capacity to fulfill specific types of insurance for businesses, with the biggest reduction in limits relating to Directors and Officers policies. Some insurance providers are offering limits between 40% and 60% less than in previous years for D&O insurance, in addition to excess liability insurance and property insurance.

The reduction in the value of limits offered can be attributed to greater losses experienced through property and D&O insurance. This is partially as a result of natural catastrophes becoming not only more severe but also more regular over recent years. This has led to considerable pressure being placed on property insurance providers.

The Director and Officer space has been impacted heavily by an increase in the volume of securities class action claims. There has also been considerable inflation of settlement costs, which has driven price rises in both financial and professional liability insurance cover.

Finally, the insurance industry as a whole is experiencing a notable depletion of their liability reserves. Whilst losses increase, insurance claim reserves appear to be deficient as well. As a result, insurance companies are introducing insurance rate increases to ensure that stakeholders receive better results. Whilst the higher rates help to ensure that stakeholders do not lose out, they result in increased costs for clients.

How can I as a policyholder avoid these increases?

At Robison, we always try to find the very best solution for our clients, focusing on sourcing the optimum cover whilst saving money on your premiums. Whether you are looking to cut the cost of motor insurance for your fleet of vehicles or require advice on reducing risks for your business, we are here to help.

Our experienced team are on hand to discuss every element of your policies. We will offer clear and concise advice on all of the potential risks, ensuring that they are well informed. This also helps us to mitigate the concerns of underwriters, leading to more policy choice and often lower policy premiums.

Robison is an experienced business insurance broker based in Petersfield, providing advice and services to businesses and individuals within Hampshire and the surrounding areas. Our highly trained staff are on hand to offer support and guidance, benefiting from a wealth of experience working with businesses across a vast range of industries. Whether you are looking for public liability insurance or employer liability cover to protect against employee personal injury claims, our team can offer tailored advice and services no matter your requirements.

Contact us today for advice or a quote for your business insurance policies on 01730 265500 or email hello@robison.co.uk

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How do you set your buildings insurance sum?

A recent survey of insurance brokers highlighted a widespread ‘guessing culture’ among insurance policyholders when setting their buildings sum insured. A renowned reinstatement valuation expert, RebuildCostASSESSMENT.com, carried out a poll to identify the source of building sums insured for 580 insurance brokers in the UK, leading them to conclude that more than a third of policyholders use ‘market value’, whilst one in five ‘simply guess’.

The majority of insurance policy holders polled (35%) incorrectly set the buildings sum insured in direct correlation to the market value of the property. Instead of focusing on what the building could sell for, policyholders should instead focus on the total cost to rebuild from the ground up, which would more often than not be considerably more expensive than the value available should the house ever be sold. This simple oversight means that over 80% of those surveyed are underinsured.

More concerning still is the 20% of insurance policy holders who admitted to simply guessing at the value of the property when setting up their policy. Considering that 10% of those surveyed simply opted for the same insurance value as the previous property owner, it is unsurprising that 90% of buildings across the UK are not insured for the correct amount, leaving homeowners extremely vulnerable.

Some 24% of insurance policyholders surveyed claimed to have set their building sum insured at the value suggested by their bank or building society. A further 6% set the value based upon the suggestion of accountants, property agents and other third-party advisers. Whilst these professional services providers may be able to suggest some level of direction, it is always advisable to commission a professional ‘Regulated by RICS’ property assessment. However, currently only 5% of insurance policy holders are utilising this expertise. Often this is due to the cost of the valuation, yet a number of risk management service providers offer a cheaper digital approach. In fact, many insurance providers (including Robison) now offer the assessment service as part of their insurance package.

For high net worth properties, underinsurance is a particularly significant issue, so we would highly recommend contacting your broker to obtain a ‘Regulated by RICS’ property assessment. In this way, you can have the peace of mind that, should the worst happen, your property and assets are properly protected.

Robison is an experienced insurance broker based in Petersfield, providing risk management advice and services to businesses and individuals within Hampshire and the surrounding areas. From health and classic cars, to sculpture and fine art, our team can offer tailored advice and services no matter your requirements.

To arrange a Regulated by RICS property assessment, or to simply speak to a member of the team, please contact Robison on 01730 265 500 or email hello@robison.co.uk

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Insurance Considerations During Home Renovations

Significant home renovations projects such as refurbishment or new extensions are often time-consuming, expensive and stressful, with any number of contractors and tasks to organise. It’s little wonder then that one very important consideration – insurance coverage during the project – is easily overlooked. As with all buildings and contents insurance policies, the onus is on the homeowner to inform their insurer of changes to the property, including any significant work that is being carried out, with failure to do so potentially resulting in your home and valuables not being effectively insured throughout the duration of the project.

In particular, there are some key areas of risk to consider during any home renovation or refurbishment:

All Risks Policies That Cover Rebuilding Costs

Firstly, you should ask your insurer about coverage for your existing structure on an all risks basis. This will ensure that the full cost of reinstatement, repair or replacement is covered throughout any building works. So, if something significant goes wrong during the course of the renovation, and the building’s structure is damaged in any way, your all risks policy will cover any rebuilding costs.

How to Protect Against Fire Damage During Home Renovations

Contract works cover is also worth considering on an all risks basis. This type of policy covers any incidents that may occur whilst work is in progress. For example, if you are adding an extension to your property, and a fire destroys some or all of the building before completion, contracts work cover will pay to repair or redo the works already undertaken.

Making Changes to Your Home, Contents and Valuables Insurance

It is essential that home contents and valuables are adequately provided for during the home renovations, as well as any furniture or household goods which are not ‘fixed’ in place. Whilst these items will most likely be covered under any existing policy, the building works will add extra levels of risk which must be accounted for to protect your home. If you have decided to store items offsite during the renovations, you’ll need to advise your insurer of this too, to maintain adequate coverage.

Keeping Your Insurer Updated When Living Offsite

For many homeowners, it is not feasible to remain in the property during the building works, be it for safety or logistical reasons. If this is the case, you will be required to inform your insurer that you are not currently residing in the property to maintain full coverage for both your home and contents – including those items which you have taken with you.

Stay Protected with a Joint Names Policy

Your insurer may suggest a joint names policy, a particularly common request for building contracts involving renovations or extensions. Typically, this means that the property owner is entitled to the proceeds of any claim which they would not be entitled to if the works cover were in the contractor’s name alone. Not only does this protect the homeowner’s position during any dispute but could offer protection in the event of insolvency of the contractor.

We’re Here to Help You

Additional insurance cover such as the policies described here may need to remain in place throughout the home renovation project, but either way, we strongly recommend keeping your building insurance provider updated with the contract duration, leaving room for flexibility in the project timescale. Regardless of the type and scale of the project, you should always consult a building insurance expert before making any changes to your property or policy. At Robison, our team have significant experience in identifying specialist policies that can ensure you, your property and your valuables are adequately protected during any home renovation.

Contact us today for advice or a quote for your building insurance on 01730 265500 or email hello@robison.co.uk

Robison is an experienced insurance broker based in Petersfield, providing advice and services to businesses and individuals within Hampshire and the surrounding areas. Our highly trained staff are on hand to offer support and guidance, benefiting from a wealth of experience working with businesses across a vast range of industries. In addition, we work closely with individuals to protect their families and property for years to come. From Construction and Manufacturing to Retail and Printing, or Travel to Fine Art, our team can offer tailored advice and services no matter your requirements.

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Home Owners in the South East Warned to Protect Against Subsidence

Record levels of subsidence insurance claims were recorded in the UK last summer, with a total cost of claims reaching £64 million* between July and September.

The South East in particular, which is renowned for building on subsidence-prone clay soil, recorded some of the driest months on record, which led to an influx of subsidence claims.

With the Met Office warning that global temperatures are likely to approach record-breaking levels in 2019, homeowners should be on the lookout for signs of subsidence and checking their building insurance policies to ensure an adequate level of subsidence insurance is provided in the event of a claim.

What is subsidence?

Subsidence is the downward movement of the ground supporting the building and the main cause of subsidence in the UK is the shrinkage of clay soils, which occurs in dry weather. Clay expands and contracts with changes in moisture content. Subsidence damage occurs because the movement is often uneven, distorting the building and causing cracks in walls, floors and ceilings.

What causes subsidence?

Subsidence is caused by changes in the moisture content in the soil and is often attributed to large trees and shrubbery surrounding the building, which suck up the moisture. However, long periods of dry weather, as we experienced in Southern parts of the UK last year, can also cause subsidence.
If your home is built on clay, you are at a greater risk of subsidence damage. Clay typically dries in the summer and swells in the wetter winter months, but due to the recent dry summers and winters, the soil has been unable to recover, leading to an increased number of subsidence claims.

Signs of subsidence

The key indicator that your home is suffering from subsidence, is the appearance of subsidence cracks.
There are many reasons why cracks may appear in the walls of your home, including damp, settlement (common in new properties) and drying and shrinkage of plaster. However, subsidence cracks have some distinctive features.

Common features of subsidence cracks:

• Visible from both inside and outside the property
• Tapered – usually wider at the top than the bottom
• Extending below the damp proof course

Other signs of subsidence include rippling wallpaper (not caused by damp) and doors and windows sticking.

Is subsidence covered by house insurance?

The UK is one of the only countries in the world that insures private homes for the risk of subsidence and you’ll usually find subsidence is covered under your building insurance. However, it’s worth checking your policy to see what level of subsidence insurance is offered, as this may vary.

You will normally pay the first £1000 excess of your policy and the majority of damage should be covered, including temporary accommodation. If the property has history of a prior subsidence claim, the excess may be more.

To ensure your building insurance will adequately protect your home in the event of a subsidence claim, seek the advice of a professional insurance broker.

Robison & Co. Insurance Brokers are highly experienced in providing building insurance policies that provide subsidence insurance and will protect you in the event of a subsidence claim. If your property has a prior history of subsidence, please speak to one of our specialists to ensure your building insurance provides an adequate level of cover for your requirements.

Contact us today for advice or a quote for your building insurance on 01730 265500 or email hello@robison.co.uk

*Stats from the Association of British Insurers ABI

We offer bespoke insurance solutions for private clients and are particularly experienced in providing insurance policies for High Net Worth Homes. Find out more about our personal insurance solutions for private clients

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Choosing Public/Products Liabiality Limits

Although each organisation makes it a top priority to ensure their products and services are both safe and effective for their clients, there is always potential for mistakes to occur. Whether it be a damaged product or public injury on company property, it is vital to ensure your organisation is protected from these costly liability circumstances.

Use this Risk Insights to understand the basics of choosing levels of indemnity for public and products liability cover, as well as top risk management tips to prevent liability at your organisation

Download Risk Insights here