For many industries there are often cycles of expansion and contraction and this too applies to the insurance industry. From years of enjoying soft market conditions, where lower premiums, higher limits and broader coverage existed, to now experiencing the impact of a hardening market. Which brings with it more stringent underwriting criteria, less appetite for risk, increased rates and higher excesses, as insurance markets seek to mitigate their exposure. So why are we now facing a hard market?
Aside from the residual effects of the economic downturn, large claims on high-profile engineering, oil and gas, power, and hydroelectric projects have helped contribute to the change in market conditions. These events served to highlight and expose the diminishing premium reserves held by underwriters, due to the prolonged soft market cycle.
The frequency of natural disasters from hurricanes in the US, floods in China and Germany, to wildfires that have consumed suburbs in California and Australia, have also contributed to the transitioning of the market. Last year alone, the industry paid out $82 billion for natural disaster losses, and these types of claims seem to be rising, with disaster pay-outs last year the fifth highest in history.1
Whilst the full extent of COVID-19 exposures will take time to emerge, the pandemic has accelerated the market’s hardening transition, with UK claims for event cancellation and business interruption estimated to cost insurers £2.5billion.2 Consequently, many insurers are now putting pandemic exclusion clauses into policies, to avoid the occurrence of future claims.
Impact on policyholders
The transitioning market conditions have resulted in many insurers now charging higher premiums, reducing cover and benefits that were once standard, and introducing tighter terms, to help the market recover from a series of tough conditions.
As a result of this, HETAS Insurance Services has reviewed the current insurance offering for HETAS installers. Although we cannot escape entirely the effects of the events highlighted, we want to ensure you are getting the best possible cover for your business. With our new revised insurance offering, we can provide flexible cover, which means you only pay for what you need.
Find out more about what we can offer at https://www.hetas.co.uk/insurance/ Or contact us either by telephone on 01905 886462 or email firstname.lastname@example.org.
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HETAS Limited is an Introducer Appointed Representative of Jelf Insurance Brokers.
HETAS Insurance Services is a trading name of Jelf Insurance Brokers Ltd which is authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services offered are regulated by the FCA (for details see marshcommercial.co.uk/info/regulation). Registered in England and Wales number 0837227. Registered Office: 1 Tower Place West, London EC3R 5BU.