In a time of rising business overheads in the UK, from extra employers NI payments, to biz rates, broadband, electricity bills and more, it’s tempting to save some cash by searching out the cheapest quote. But is that the best policy for your niche? Here are some insights from Everywhen;
Businesses approaching their insurance renewal should stop asking simply, “How can we get the price down?” and start asking “How can we become a better risk?”, according to Everywhen.
With UK businesses continuing to face pressure from employment costs, business rates, energy bills and wider operating expenses, reducing insurance premiums can understandably become a priority.
But Everywhen warns that an excessive focus on price at renewal can cause businesses to overlook one of the biggest factors capable of influencing their insurance outcome: the way their risk is understood, managed and presented to insurers.
Chris Brady, CEO of Corporate and International and Risk Advisory Services at Everywhen, said:
“The businesses that consistently achieve the best insurance outcomes aren’t necessarily those focused exclusively on negotiating the lowest premium. They’re the ones focused on becoming a better risk.
“Insurers aren’t looking for perfect businesses. They’re looking for businesses that understand their risks, manage them effectively and can demonstrate that they’re taking the right actions to protect what matters most.”
The renewal conversation starts before renewal
Everywhen says the increasing complexity of cyber threats, supply-chain disruption and business interruption means insurers are placing significant emphasis on resilience, risk governance and the controls businesses have in place.
Everywhen has worked with businesses where improving the understanding and presentation of risk, alongside introducing relatively simple risk-management measures, has helped secure insurance that had previously been difficult or impossible to obtain.
In one case, a sawmill and timber products manufacturer had been unable to secure property and business interruption insurance. In another, an online retailer was struggling to obtain cyber cover.
Rather than radically changing either business, Everywhen worked to identify and articulate existing controls alongside introducing relatively low-cost risk improvements, enabling the risks to be presented differently to insurers and cover to be secured. And the potential impact isn’t confined to obtaining cover.
Brady said: “I’ve seen some clients achieve premium reductions of between 20% and 50% when we’ve helped them build a strong and translatable risk-management approach and story, alongside improvements in coverage and insurer engagement.
“But those benefits are often a by-product. The primary objective of risk management is to create a stronger, more resilient business — protecting its brand, balance sheet, cashflow, assets and people.”
Don’t wait for the renewal notice
Everywhen argues that one of the biggest mistakes businesses can make is treating risk management as something to consider only when renewal approaches.
Cyber resilience, business interruption planning, fleet risk, flood preparedness and health and safety can all influence the overall picture presented to insurers.
“Risk management doesn’t start at renewal,” Brady added. “If you wait until that point, opportunities to influence the outcome may already be limited.
“The strongest businesses take a year-round approach. They regularly review vulnerabilities, strengthen controls and build a clear picture of how their risks are being managed.
“Quality detailed and focused risk-management information gives insurers the ammunition to underwrite positively. If we can demonstrate that risks have been identified, considered, managed and mitigated, that gives insurers greater confidence when considering terms, capacity and pricing.”
Everywhen says businesses approaching their next renewal should therefore consider changing the question.
Rather than simply asking “How do we reduce our insurance premium?”, they should ask: “How do we increase insurer confidence in our business?”
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