Verisk’s property report highlights that government measures will take time to reduce claims cycle times and improve work-in-progress (WIP)
Verisk, a trusted authority in the insurance industry, reports that the government’s decision to relax the rules for construction workers to enter the UK from abroad, should increase the pool of skilled workers available for property repairs. However, the company suggests it will take time for the increase in the supply of labour before it positively impacts the property claims cycle times and improves work-in-progress (WIP) which has risen in 2023.
In its latest report, Verisk outlines the warning given by the Migration Advisory Committee that leaving the EU created shortages for occupations such as bricklayers, roofers, carpenters and plasterers. The Home Office recently added these professions to its shortage occupation list which should mean entering the UK for these workers should be easier.
Ben Blain, Head of Property at Verisk said:
“Relaxing the rules for skilled workers to work in the UK from abroad will be welcome news for insurers and contractors. A shortage of labour has negatively influenced the delays in completing repair work for policyholders.”
As well as labour shortages, there have been other pressures causing the cost of repairs to increase, and lengthening the time taken to complete repairs. Ben added:
“Increases in the cost of materials, oil, gas, and plant have made repairs to commercial and domestic properties significantly more expensive for insurers and contractors alike. The shortage of building materials caused by the war in Ukraine also contributed to the challenges faced by insurers and contractors.”
UNDERSTANDING THE CLAIMS MARKET
Verisk analyses and shares insight with its customers on the impact of macroeconomic, regulatory and political changes. Together with trends in claims activity, Verisk provides insurers, contractors and other organisations involved in the property repair process with the tools to make informed strategic decisions in line with these shifting dynamics. The Verisk team researches over 50,000 material and equipment price points every year which, together with labour costs, provides the benchmarks for insurers and contractors to use for agreeing a fair-to-all schedule of costs for repairing properties.
As Ben Blain explains:
“The data we share with our customers provides a platform for fair and transparent discussions between insurers and contractors. By offering an impartial service for setting repair rates, it strengthens their relationships and streamlines the process. This ultimately makes for swifter
decision making to get repairs underway which is a clear benefit for policyholder.”
The Verisk report has some good news for insurers in particular, with clear indications that the peak of inflationary pressures pushing up the prices of commodities, seems to be plateauing. Ben Blain said:
“The last 18 months have seen significant increases in the cost of materials. One example is the cost of bricks and concrete blocks which have risen by 24%. But the positive news is that the worst of the inflation pressures appears to be behind us, but that does not mean we can expect prices to come down markedly in the near to medium term. For example, bricks were 50p each and they are now over £1.00, and we are unlikely to see a return to pre-high inflation price levels.”
Verisk’s service also enables audit checks of property repairs and the information is available to insurers and contractors. This means greater transparency, better communication and a clear focus on quality control. The FCA’s Consumer Duty rules mean this tool can be used to ensure the best possible outcomes for policyholders. As Ben Blain explained:
“Our service exemplifies how data-driven decision-making can support a range of stakeholders involved in the repair of property. By leveraging the insights we provide, businesses can unlock new opportunities for growth and collaboration.”
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