UK businesses amend or cancel insurance coverages in light of economic uncertainty
Over three-quarters of brokers have seen clients change policies over the past six months as they prepare for further economic uncertainty.
85% of brokers are keen to gain a better understanding of the macro-economic landscape to help their clients plan for the long term.
Economic uncertainty and the costs associated with doing business continue to present challenges to UK businesses, with an increasing number cancelling or altering their insurance policies, according to their brokers.
Six months on from its first Broker Pulse, RSA Insurance has revisited the views of UK brokers, finding that economic uncertainty remains their clients’ biggest concern, surpassing those around political uncertainty and supply chain disruption.
The majority of brokers surveyed (54%) said that economic uncertainty is a common concern among their clients. This shows little sign of abating, with many (42%) stating that economic uncertainty will continue to be a challenge for their business over the next 18 months. Additionally, the survey shows that the cost of doing business remains a significant concern. As a result, over three-quarters (79%) of brokers said they are seeing changes or cancellations made to insurance cover.
The two most commonly altered policies are property (27%), and employers’ liability (26%). Property and liability insurance are typically among the last optional elements of insurance cover businesses discard, due to the potential cost of property damage or liability claims. However, with RSA’s previous Broker Pulses suggesting that many businesses have already dropped other optional policies, such as personal accident insurance, these latest findings demonstrate how stretched firms are by the ongoing economic crisis.
Despite these challenges, and the increase in policy alterations, more than 80% of brokers agree that they are generally well-equipped to support clients in navigating these concerns. However, operating in such a fast-paced economic climate, 85% of brokers feel they would benefit from further insight and knowledge-sharing by insurers to understand the macro-economic landscape and inform long-term planning for their clients.
Almost half of brokers agree that further support from insurers in the form of insight email reporting (47%), virtual insight sessions (42%) and roundtables or seminars (40%) would help them better navigate the uncertain external environment they’re operating in and maintain the best results for their clients.
Lee Mooney, Managing Director, Commercial Lines at RSA Insurance commented:
“The findings of our latest Broker Pulse reinforce that businesses are feeling the pinch of the economic crisis. It’s worrying that some businesses are resorting to reducing or cancelling insurance cover, as this leaves them more exposed to any unexpected financial shocks that may arise. As an industry, we must continue to support businesses as much as we can, and a significant part of this involves working with brokers to provide them with the necessary insight to help them and their clients navigate this period of uncertainty.
We’re constantly talking to brokers to understand the challenges facing their clients, but also facing their own businesses. The Broker Pulse is another valuable tool we use to help us understand the issues brokers and their clients are looking at, but more importantly, offer insight to help them combat these concerns.”
Authored by RSA
