Home insurers could see a rise in premiums over the coming years if home working becomes more popular, as risk will shift from commercial property to household insurance, according to GlobalData.
During the lockdown, home insurance policies will fully compensate a home-working claimant, but policyholders will have to amend their cover once the lockdown is lifted. It is likely that many people and businesses will see the benefits of working from home. It offers employees a greater work-life balance and can help businesses cut down on overhead costs – so it is likely to be much more commonplace after the impact of the virus than before.
GlobalData analyst, Yasha Kuruvilla, comments: “Working from home could increase the risk at a property due to expensive equipment being stored there – as could regular visitors to the property due to increased theft or liability risk. On the other hand, businesses will not need as much office space and will have fewer contents on their premises, reducing the premiums on commercial property policies. This shifts risk away from commercial property towards home insurance, and premiums generated in the two business lines will need to be adjusted accordingly.
“Aviva, AXA, Zurich, RSA and NFU Mutual all have strong market positions in the UK in both the household and commercial property markets, which puts them in a strong position to capitalize on the shift in premiums. Lloyds Banking Group is the second largest underwriter of household insurance and stands to benefit the most from a shift in premiums away from the commercial property sector. On the other hand, Allianz’s stronger position in commercial property insurance compared to household insurance may result in it taking more of a hit.”