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Balancing the Scales in a Hardening Market
By Bernadette Vanderwolde
In the past few years there is no doubt we have enjoyed the “premium scales” being in our favour. We were in what we commonly call a “soft market” and in most cases, premiums were heading in a downward cycle. We have seen the scales start evening out and reports are now saying the scales are tipping. A major crash is not expected, however, we are slowly moving toward a “hard market”. This change will inevitably bring higher premiums for most businesses. Adroit Insurance & Risk risk advisers are always focused on achieving the best outcome for their clients, regardless of the market conditions. Below are a few tips to help you balance the scales in your favour –
Relationship with your risk adviser
The relationship with your risk adviser at this time is critical. Your risk adviser is dedicated to working with you and to truly understand your business as well as the current market conditions. They can assist and direct you based on your individual circumstances.
History with your existing insurer
Consider and review your existing insurers. Getting alternative quotations is common in any market but the relationship with your existing insurer will, in most cases, assist to reduce the impact of any premium increase. All insurers will be under pressure to increase their gross written premium and improve their overall results. The benefit to you is two fold. Firstly they understand your business but secondly and most importantly they have collected premium from you for a number of years. This assists in keeping premiums to a minimum, particularly if you have had no claims or only one or two small claims.
Consider the policy excess
It is always relevant to review your insurance cover in detail. One consideration is the policy excess. The policy excess allows you to take on more of the risk yourself and can often mean premium savings. The cost benefit analysis will differ in every circumstance but it is certainly something worthwhile to consider.
Risk mitigation strategies
Insurance companies love clients that want to protect their own business – the lower the risk of a claim, the cheaper the premium. They will often provide considerable savings to clients that adopt effective risk mitigation strategies. Ensure you have considered all risk mitigation strategies and ensure your risk adviser/insurer is aware of the strategies you’ve adopted. Often we see clients take very effective internal risk mitigation strategies but not make their risk adviser/insurer aware of these. They may be simple or complex strategies but make sure you consider them.
If you have a high level of claims, it’s important to do what you can to manage them. This is particularly relevant for areas of insurance where claims are inevitable, for example, large motor vehicle fleets. While the odds are that you’ll have to file more claims than someone with just one vehicle, there are strategies you can put in place to reduce the number. Make sure you are working with your risk adviser to gain an understanding of how/why/when your claims are occurring and as above put in place strategies that can reduce them. By reducing either the number of claims or the total costs of your claims you will be in a better position to reduce the costs of your insurance or mitigate any increases.
Adroit Insurance Group risk advisers are always available to discuss these and other strategies with you. We value all of our clients, and we want to ensure you get the most from your insurance programme.