AIM’s guide to the Hardening Insurance Market
We are aware of the financial issues that many of our Members are still facing. At the time of writing, we will also be familiar with the new dates for easing of the lockdown and hope that this brings comfort that businesses can start to reopen and once again our Members can provide their much-needed activities.
Unfortunately, over the last 12 months the insurance market has hardened considerably and some insurance customers are finding that prices have increased across a range of different covers.
What is a ‘Hard Market’?
A hardened insurance market usually affects customers in the following ways:
- Higher insurance premiums
- Fewer insurers
- Reduced choice of products
- More restrictive cover
What causes a Hard Insurance Market?
Like other financial markets, the insurance market also changes depending on supply and demand. The insurance market usually follows a cycle which fluctuates between a hard market and a soft market. There are many factors that can lead to changes in the insurance market.
Even before the COVID-19 pandemic, several underlying market factors were contributing towards the insurance market hardening, including:
- extreme weather events such as Storm Dennis and Ciara affecting property claims
- interest rates staying low
- a general rise in insurance claims (particularly in the home and motor insurance sectors)
- changes to the Ogden rate, the rate used to calculate future losses in high value compensation claims, which also have an impact on the levels of compensation payments made to claimants.
When coupled with pressures arising from the COVID-19 pandemic, these factors have inevitably reduced insurers’ appetite for offering extensive cover or charging low premiums.
How is AIM Supporting Members?
AIM is doing all it can to provide the best, tailored, cover for Members, at the most competitive price, because we fully appreciate that many of our Members continue to face ongoing financial difficulties.
Therefore, when your renewal is due, the team will ask you to provide up to date information on your business so they can provide your quotation and ensure that it is accurately meeting your needs. This will include details of your annual turnover and wage roll figures and any other information about the activities you provide. If you are no longer offering or providing a particular activity, please let the team know as you don’t need to be paying for cover you no longer require. We will always try to be as competitive as possible on prices so please do chat to the team if you have any queries.
We are committed to providing the best service for our Members and if you have any further queries or feedback please do come back to us.
