Published: 8 April 2025
A changing insurance market: the ideal time to review your risk programme
Over the past 18 months, many businesses have faced challenging times, with some still operating in survival mode. Economic pressures have led some companies to scale back asset growth, and understandably, discussions around expanding coverage, especially for emerging risks, have been delayed.
As we transition into a softer insurance market, there is a noticeable shift toward more competitive pricing, with some sectors already seeing improvements. This is a welcome development for businesses looking to manage their risks more effectively.
We believe this evolving market is a great time to reassess your business’s risk portfolio. Previous decisions may no longer align with current or future needs, making it important to ensure your coverage reflects your risks and goals.
To make the most of pricing reductions while also ensuring adequate protection, here are some recommendations.
During periods of economic hardship, businesses may reduce their coverage to save costs. In addition, inflation, increased rebuild costs, and rising inventory values could mean that the current sum insured is no longer accurate. These factors could lead to underinsurance, where the sum insured is insufficient to cover the full replacement value of a business. It’s important to re-check your sums insured to make sure they’re up-to-date and in line with the various factors at play in the current market.
As we settle into 2025, many businesses have already completed their planning for the year ahead. This is a good time to assess whether your insurance is still appropriate for the shape of your business now and the risks it could face over the coming year. Especially if you have plans to expand or grow.
It’s also essential to consider new risks that have emerged or will continue to grow in importance throughout the year. For example, Cybersecurity threats are now considered a critical risk to businesses. It's crucial to not only review your current policies but also explore additional coverage options tailored to these emerging risks.
A professional valuation review for your commercial properties should be carried out at least every two years, so if you’ve been putting it off, now’s the time! The valuation helps set the correct insurance levels to ensure you have the appropriate level of protection in place in the event of damage, loss, or destruction.
It’s vital to review your Business Interruption insurance, especially as economic changes can impact your business risks and revenue. Your current policy may no longer provide the coverage you need. By reassessing your coverage types, limits, and indemnity (time) periods, you can ensure you're protected against emerging risks and have sufficient coverage to keep your business operating smoothly if the unexpected occurs.
With more competition among insurers, there is increased opportunity to review your coverage options. We recommend talking to your broker and asking them to explore the market for the range of coverage options and pricing available. Your broker can help you compare different insurers and ensure you're not only securing the right level of protection but also taking advantage of any competitive pricing available in the current market.
Our team of specialist commercial brokers can help you identify any potential gaps in coverage and recommend additional or more suitable policies to provide comprehensive protection. Please consult with your Rothbury Broker to fully explore the opportunities the changing market presents.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or professional advice. For specific advice tailored to your situation, please consult with a qualified professional.