Summer Market Update

Specie, Fine Art, Cash in Transit and Jewellery

After three months of lockdown and working from home, the full effect of the COVID-19 pandemic on the insurance market is still yet to be seen. However, there is no doubt that in some areas certain insurers will be making changes to their appetite and underwriting strategy.  The Specie Market is not immune to outside influences and is likely to be affected across the different disciplines to varying degrees.

With this in mind, it is a good idea to start planning ahead in respect of your insurance arrangements. Allowing more time to negotiate and weigh up your options is key to improving the output and achieving the results you want to achieve.

We encourage clients to be proactive, as you may see insurers changing their appetite, moving away from certain types of business and generally being more selective in their risk preference. Some insurers will be hit harder than others depending on their (and their colleagues) exposure to COVID-19 related losses (such as Business Interruption) but also how their companies overall portfolio has been performing. In addition, if this year sees underwriters at all impacted by the Hurricane season and other Natural Catastrophe losses, insurers would likely be looking at their worst underwriting result for several years.

Whilst some or all of the above may mean we are unavoidably heading towards a tightening of market capacity, there are steps we can take in order to mitigate the impact on your insurance arrangements.
Communication during this time of change is increasingly important. Remain in contact with your broker and insurers if possible, to keep informed on any developments as and when
they occur.

We recommend that you start your renewal discussions early and ensure your presentation is well prepared. Provide full updated information and be prepared to answer more questions than you may have previously. A possible result of the market conditions is that insurers may likely have more scrutiny around their decision making and therefore need more details and insight regarding your business. We encourage clients to demonstrate their proactive approach to security, processes and procedures along with the continual investments being made in order to mitigate loss and reduce risk.

We must not forget that a tightening market creates an opportunity to set your business apart from your competition when others are not able to do so. The businesses willing to adapt with these changes will reap the most benefits. Building a plan and strategy with your broker is key and will result in building confidence with the market to achieve the best possible outcome.

During this time of change having the right risk advice and strategy remains important in order to deliver the best outcome for you and your business.