Airmic and the German risk and insurance management association, GVNW, surveyed members in January and February to reveal the true extent of the hardening insurance market and contemporary experiences.
More than 90% of respondents in the UK and Germany reported rising rates, but impact is going beyond premium increases. Capacity is being reduced, exclusions are being increased and there is an unavailability of cover in some lines and sectors.
There is also frustration at poor or late communication from insurance partners (43% UK, 62% Germany) and over half of policyholders are only partially satisfied or not satisfied with service from brokers.
“The biggest challenge for our members has not been price rises per se, but the lack communication and consultation,” John Ludlow, Airmic CEO, said at a speech to law firm Herbert Smith Freehills in February.
“Decision-making has become centralised, with little inclusion of the end client. Changes in strategy have been communicated so late in the day that it has affected the timing of renewals. And while in many cases price rises appear justified, in other instances pricing feels aggressive and opportunistic.”
Joerg Henne, Managing Director of GVNW, agreed that communication has been lacking and said now was the time for services to shine.
“With prices rising, the service provided by insurers has to shine even more – it has to be perfect, and yet both surveys reveal customer dissatisfaction,” said Mr Henne.
“Communication and transparency need to improve and good risk management should be rewarded. Businesses understand their risks better than ever before and the fact that we are seeing risk professionals exploring alternative risk transfer solutions for 2020 renewals should be a wakeup call to the market.”
Julia Graham, Deputy CEO and Technical Director at Airmic, said it was also apparent that for many risk professionals, brokers and underwriters this was the first time they had experienced a hard market.
“For Millennials on both the buying and service side of insurance, this is a new experience but we believe it is here to stay and they will need to navigate it,” she told Airmic News. “As such, more training and education opportunities will be necessary and Airmic is planning a series of workshops for members on this topic.”
Airmic will be conducting a second survey later in the year with a specific focus on the claims and post-Covid-19 experiences of its members.
To read the full press release and more results from the survey, click here.