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At the end of what has already been a very challenging year, it is clear that there are still some tricky times ahead. The financial fallout of a global pandemic has left many businesses and individuals feeling very uncertain about their future. And adding salt to the wounds, the price of insurance policies is rising. This is just one of the many hidden side effects of the coronavirus crisis, but it also the result of some underlying symptoms of a “hard market” that the insurance industry was starting to feel before COVID-19.
As the name suggests, a hard market is associated with hard times, but don’t despair as this won’t last forever. Insurance is as cyclical as the seasons, swinging between a hard and soft market every few years. Whichever “season” we are in affects the availability – and the price – of insurance policies. A complex combination of factors has led to the hard market – and high costs – we now face, so here are just a few of them:
Put simply, demand has outstripped capacity, driving the prices up.
The coronavirus outbreak came when insurance was already teetering on the edge of a hard market. Back in April, insurance experts Lloyds predicted the pandemic would cost the global industry £166 billion, and expect to pay £5 billion in related claims themselves. British insurers could have to fork out more than £900 million for claims connected to Covid-19, and a further £275 million to travellers who had their plans disrupted. Unfortunately, this does mean that the hard market will last longer than usual while the insurance industry recovers. But that does not mean that we won’t be able to find the best cover to your business.
All this might sound extremely daunting, especially if you just want to find a suitable policy to suit your business or charity’s budget. We can’t deny that this task will get harder in a hard market, but you can soften the blow by bringing in a specialist broker to guide you through the policy picking process.
At Unity Insurance Services, our longstanding relationships with a range of insurers allows us to chat to the right people for your particular needs. Whatever state the market is in, we keep a close eye on any fluctuations so that, if change is on the horizon (or just around the corner), we can get in touch with you ahead of your policy renewal date to discuss how the changes will affect you.
If you have any concerns or questions about how coronavirus could affect your policy, please get in touch with one of our friendly advisors on 0345 040 7702.