Insurance costs look set to increase — and not just because of the effects of the coronavirus. H&H finds out more about what to expect and what you can do
THE equestrian industry should prepare for increasing insurance premiums owing to the first “hard market” for years, caused by a “perfect storm” of factors.
Even before the coronavirus hit, the insurance market was being affected by a number of factors, but the pandemic has exacerbated the situation, resulting in the first hard market for years. This means premiums rise at a rate higher than would otherwise be expected.
SEIB Insurance Brokers deputy CEO Suzy Middleton told H&H significant fires in late 2019 affected property insurance – more than 20 resulted in payouts of over £10 million each – then last winter’s storms meant insurance settlements of over £400 million. The Ogden rate, a multiplier used to determine payouts for personal injury claims, has increased, while “low interest rates and high reinsurance rates compounded these problems, all of which have now been dwarfed by Covid-19”.
“I’d highly recommend people understand their premiums will be going up, and it’s not just because of the pandemic,” Mrs Middleton said, adding that clients may not expect the increase if they have not been doing as much business, or as much riding, as normal.
She stressed that holders of all types of insurance should be prepared well before their renewal dates, to allow time to check policies, and use a specialist broker.
“You need a broker who knows what they’re talking about, and has sustainable options on where to place the cover,” she said.
“Be careful who you use as some insurers may be unrated or not financially stable. The last thing you need is to be trying to reclaim costs in a pandemic situation if the underwriter goes under.”
Mrs Middleton said different types of policy will be affected more than others, and those who have a high history of claims will be worse affected.
“We haven’t seen a hard market since 2001 and therefore many have not experienced the volatility that could follow,” she said. “It is imperative for those looking for insurance cover not to chase the cheapest rate but to check very carefully that you have the cover you need with a reputable company.
“It’s not a buyers’ market but brokers are working as hard as they can to protect their clients.”
SEIB CEO Barry Fehler added: “My advice is to work with a specialist broker who understands your needs, and prepare for your renewal earlier than normal. This will give more time to find the best package for you in the current market.
“Be flexible. The market has changed and you might need to make changes to your cover, to ensure you get what you need at a desirable price.”
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