By Phil Huggins, head of office for West & Wales 

Despite the world seemingly returning to some sort of normality following a difficult 24-plus months, the increased cost of living this year has stung everyone.

But for business owners, they have been stung twice, with a rise in the cost of fuel and raw materials to name a few, seriously impacting the day to day costs of running their businesses.

Speaking to our clients in Gloucestershire, it does appear businesses have been hit particularly hard. For those businesses relying on vehicles for example, diesel costs are rising on average 50p per litre within the year.1 This has added pressure on profit margins for owners.

Here at Marsh Commercial in Gloucestershire, we empathise with the struggles business owners are facing today.

Commercial insurance programmes can also be a significant, although necessary expense, especially in today's challenging market. It's therefore understandable that as costs rise, businesses are naturally beginning to look at ways they can cut their cloth, scrutinising their insurance in the process.

However, by taking the right steps and working with the right broker, business owners can find value from insurance programmes at renewal.

The current state of the UK insurance market

Now before we share our top tips, it's worth briefly highlighting the state of the UK insurance market.

The bad news is that we're still very much in a challenging market. The good news however is that we have seen the rate increases in all major coverage areas decelerate. In fact, insurance pricing in the first quarter of 2022 in the UK increased at a lower rate of 20 per cent, compared to 22 per cent in the fourth quarter of 2021.

If you're interested to learn more about the state of the UK insurance market, we'd recommend taking a look at this Q1 Pricing Review from our colleagues in Marsh.

Top tips for having the most efficient renewal

Here are our top tips for owners/operators:

• Start your renewal process early

This allows you to examine your options in sufficient time and make a decision based on value rather than necessity. We always recommend to touch base with your broker at least two to three months before renewal, if not sooner. Together, you can work to provide a detailed presentation inclusive of risk management provisions, to all relevant insurers in the sector.

• Regularly communicate with your broker

Your broker should be advising on market conditions, likely hurdles and proposed plan of action well before renewal. In return you should be devoting time to discuss your risk management processes and strategic plans over the next two to five years, to ensure the presentation to market really details the business' risk profile and potential.

• Think about your approach to market if looking elsewhere

Should you be exploring your options for an alternative broker, avoid using more than one other if you can. Having multiple brokers approaching the insurance market on your behalf often drives adverse results. This could include some insurers refusing to quote.

• Keep your insurance renewal front of mind throughout the year

This is particularly important when considering new contracts, new projects or undertaking any work which may be deemed a higher risk. Considering the impact on your insurability when making your decisions ensures any new risks can be mitigated as early as possible.

• Investigate your claims

Claims handling continues to be imperative, with first notification of loss processes a key focus area. Working closely with your broker and implementing the relevant training and processes throughout your organisation will be imperative in maximising cost efficiency at renewal.

Even the best risk-mitigated businesses have insurance claims. Notifying your insurer swiftly and working with your broker can help bring these to a resolution as soon as possible. It is also a great way to reduce the prospect of a large unresolved claims reserve sum. Claims reserve is money set aside for a claim that has been reported but not settled, any insurers looking to underwrite your risk will pay close attention to this.

Closing thoughts - engage early, benefit from the results

To conclude, the insurance market is showing signs of slowing premium increases, however to see any benefit in real terms businesses must ensure they are appealing to the market. By working closely with your broker, this is achievable. Failure to do so however, will only add to the ever growing problem of the rising cost of business.

Here to help

Speak to our local experts in Gloucestershire for help and support. Contact phil.huggins@marshcommercial.co.uk or call us on 01905 892 200.

Phil is head of office for our advisory team across the West & Wales and has been with Marsh Commercial for five years. He's racked up an impressive 33 years' experience within the insurance industry with various roles ranging from underwriting, claims, broking and management.

During that time he has amassed a wealth of experience with specific skills in property and casualty insurance, personal insurance and risk management, and is professionally qualified to Dip CII and BTEC National Diploma in Business & Finance.

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