UK Insurance Premiums Set to Rise Warn SEIB

Premiums set to rise as the UK insurance market enters volatile phase not seen for 20 years

At this moment in time, it is vitally important for individuals and businesses to review their insurance, including premiums. There has been a lot in the press that some did not have the cover they expected when the Covid-19 pandemic hit. On the back of Covid, and many claims earlier in the year due to the weather, we are in what is known as a ‘hardening’ insurance market.

In a hard insurance market, premiums rise at a rate above what would normally be expected. Due to these circumstances, now is a good time to insure with a specialist insurance broker who should have buying power with the insurers and can ensure the continuation of cover for assets and liabilities at a reasonable cost.

SEIB’s Deputy CEO, Suzy Middleton said,

We haven’t seen a hard market since 2001 and therefore many have not experienced the volatility that could follow. It is imperative for those looking for insurance cover not to chase the cheapest rate but to check very carefully that you have the cover you need with a reputable company.”

A perfect storm of factors has resulted in the market ‘hardening’. Before Covid struck in March 2020, premiums were already being squeezed. In the last half of 2019, property insurance rates were affected following several significant fires – over 20 happened with payouts of over £10 million each. Also, the Ogden rate, which works out ‘lump sum’ payouts for personal injury claims has increased, resulting in larger settlements per case to ensure adequate funds for lifetime care if required. Storms Dennis and Ciara caused widespread havoc in February 2020 resulting in insurance settlements in excess of £400 million. Low interest rates and high reinsurance rates compounded these problems all of which have now been dwarfed by Covid-19.

People requiring insurance cover in niche sectors including the equestrian market may be able to minimise the effect of the hard market premium rises through using the services of a specialist broker with detailed experience of the market. An experienced, effective broker will have excellent and flexible relationships with several insurers meaning the pool of available cover is vastly increased. Suzy Middleton added,

You need a broker who knows what they are talking about. Be careful who you use as some insurers may be unrated or not financially stable. The last thing anyone needs is trying to reclaim costs in the midst of a pandemic if the underwriter goes under.”

SEIB Insurance Brokers CEO, Barry Fehler said,

my advice is to work with a specialist broker who understands your needs and prepare for your renewal earlier than normal. This will give more time to find the best package for you in the current market. Be flexible. The market has changed and you might need to make changes to your cover, to ensure you get what you need at a desirable price.”

SEIB specialises in an array of distinct fields, boasting more than 50 years of experience in horse insurance, more than 40 years of experience in funeral and private hire insurance, and decades more experience in other areas covering both business and personal.