Without dwelling on the Covid period and its impacts on us all I thought it would be useful for all our clients if I share some thoughts on the current insurance landscape and the impact this may have on renewals for the year ahead and beyond.
There are a number of areas where we have seen some dramatic shifts in the past two years. Some of this is attributable to Covid and some are reflective of changing dynamics generally:
Whether domestic or commercial we are seeing significant increases in the costs of rebuilding properties following a loss. This is heavily influenced by the cost of materials and the availability of builders, labour costs are rising aligned to the broader increase in inflation more generally but whilst it was hoped such increases would be short-lived, this cannot be assured (This is now unlikely). As such it is important that we all consider the rebuilding sums insured we have in our policies to prevent ourselves being underinsured.
With fewer vehicles on the road for much of the past two years, there have been fewer motor claims. However, we are not necessarily seeing this translate to cheaper car or commercial vehicle insurance premiums. This is once again being influenced by the repair costs and therein the costs of experienced labour going up and a scarcity of parts meaning increased prices. In addition, cars have become more technologically advanced which means higher costs in repairing even minor bumps. For instance, a major insurer recently shared with us that with electric vehicles they are seeing double the claims cost of conventional cars and twice the repair time. This is being further worsened by a shortage of spare parts for the newest models.
There has been a significant increase in cyber attacks in recent times as criminals seek to exploit the increased use of online shopping and transactions. The type of attack that has seen the greatest uptick is Ransomware attacks as criminals attempt to induce unsuspecting individuals to open a document or link that leads to software being placed on the individual’s computer that ultimately allows the criminals to extract information for criminal purposes. As a result, many insurers have reviewed their cyber insurance offering which has resulted in increased premiums and changes to core coverage offered. If this is an area of concern for either personal or business insurance please get in touch with your Luker Rowe Account Manager. A cyber attack is a real threat to any business and its ability to trade. There is a misconception that cyber attacks are only aimed at big businesses. This is simply not true.
With many of us spending more time at home it has led to increased home shopping and room refreshes. If you have recently purchased new electrical equipment, furniture or exercise equipment or a combination of all of them it has the potential to add up to a significant value of possessions. For that reason, it is always worthwhile to periodically add up the value of your contents and valuables insured to ensure you have sufficient cover within your contents sum insured. It is worth remembering that in general the cover provided under your policy is based on the new price and not the second-hand value.
It may also be of interest to note some changes taking effect to the Highway Code this week. These include significant changes to the way motorists and cyclists interact on the roadway amongst other things https://www.gov.uk/government/consultations/review-of-the-highway-code-to-improve-road-safety-for-cyclists-pedestrians-and-horse-riders/summary-of-the-consultation-proposals-on-a-review-of-the-highway-code
All of these circumstances unfortunately combine to indicate increased costs for businesses and consumers. As your broker we strive to help you navigate these challenges and review your circumstances to help you find the most suitable solution for you.
From my team and I, we wish you a happy and prosperous year ahead.