2016 has seen numerous changes to the insurance market underwriting personnel, with whole teams moving from one insurer to another. This has resulted in aggressive rating and competition to win new business and increase their market share resulting in lower rates for real estate clients including those with residential risks.
The benign weather conditions, particularly in Scotland have produced some pleasing results for insurers, meaning profit ratios are at an acceptable level. Significant rating increases are now unlikely to materialize in 2017 despite the frequency and volume of water damage losses which continue to plague residential properties.
JLT Specialty (JLT) has seen remarketing of risks and has also realized premium savings for clients as holding insurers drop their renewal prices to ensure any new business wins are not eroded by a declining retention rate.
All this suggests a positive result for those purchasing insurance, despite the tariff increases to Insurance Premium Tax (IPT) which is likely to continue into 2017.
To summarize 2016 we have seen:
- The implementation of the Insurance Act, which came into force in August 2016, introduces a ‘duty of fair presentation’ which clarifies the requirements for the content of information presented to an insurer pre-contract and the form in which the information is presented. It also provides clarification on the remedies available to insurers where a fraudulent claim has been made and when warranties and terms not relevant to the loss should be remedied
- The Increase in IPT to 10%
- A number of insurer mergers and acquisitions
- Increasing pressure from leaseholders and occupiers on managing agent commission earnings
- Continued lender scrutiny on not only adequacy of policy coverage to assets insured but also wider undertakings being requested to the favour of the lender from both the broker and insurer community
- The developing of financial insurance products within the private rented sector (PRS) to provide an indemnity in unbudgeted lifecycle costs.
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For further information, please contact Shaun Grainger, Associate, JLT Specialty on +44 (0)7917 240 509