Tough Market: Finding the best cover at the best price
Recently businesses and consumers have navigated rising premiums when purchasing insurance. This has triggered national inquiries and calls for change in the industry.
Particularly hard hit are SMEs in catastrophe-prone areas. It has been near impossible for holiday and amusement parks to find underwriters willing to take on their risks. Other sectors have had a similar experience when trying to get cover.
This has caused a rebalancing of the insurers' appetite for risk, which is why negotiating policies for emerging threats or higher-exposure risks have been so frustrating.
It's clear there needs to be an improvement in the availability of cover, and the insurance industry has started to take steps to make this a reality.
This year, the Insurance Council of Australia completed a comprehensive review, which involved commissioning well respected former regulator John Townbridge. After examiing the commercial market, he worked to identify practical solutions for affordability and availability issues.
His report was made public in September, and the recommendations it detailed have since been accepted. Now, they are being implemented to address some of the biggest problems SMEs are facing at the moment.
A new Business Advisory Council has been formed to work through industry availability and affordability issues. They mainly focus on Professional Indemnity, Public Liability, and Business Interruption cover, looking at market 'gaps' and evaluating risks and potential solutions.
The advisory council will liaise with the Insurance Council board. On the board are CEOs of some of Australia's most established insurers, and the National Insurance Brokers Association (NIBA) - our national body - is also involved.
According to the Trowbridge report, the market is hardening, there is no universal solution and collaboration, and goodwill between the insurance industry, business sectors, and governments will be required.
It was also suggested that when significant changes are just around the corner, there needs to be plenty of notice before renewals. And if premiums are being increased, more information detailing why this is the case should be provided. If there are practical changes that could be made to better certain situations, these should be outlined as well.
A working group, which involves both insurers and customers, was another recommendation made in the review. It would aim to simplify and streamline definitions and documentation for SME policies. This would not only make the process less complex for the SME sector but also clients.
While the benefits of these efforts won't necessarily be seen overnight, helping to address the difficulties faced by small businesses is a priority for insurers. And as brokers, we have an essential role in giving feedback, assisting with solutions, and guiding clients.
As market conditions and responses countinue to change, making sure you have the most appropriate cover relies on having regular discussions with your broker. They understand the market and can help to ensure you have the latest information.
How Coverforce can help
Our experienced team of brokers are here to help assess your risks and provide personalised advice on the right insurance program to adequately protect your business and assets.
If you haven't already, get in touch with your local Coverforce office today for more information or to arrange cover.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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