Are your business risk exposures and assets the same as they were 12 months ago? As many businesses make adjustments to how they function to meet changing economic conditions, to respond to consumer demand or make improvements over time, insurance renewal is an opportunity to review your risk exposures – and how much of what type of cover you’ll need over the coming year.
Securing optimal protection and insurance renewals for medium to large businesses requires preparation, expertise and strategic considerations, especially in situations where both business risk needs and insurance markets have sustained significant pressure and change. The current environment for business insurance is known to be challenging and in a ‘hard’ cycle with higher premium prices and less availability in cover, so renewals are best managed in a structured and strategic way.
Tackling business insurance renewals with the expertise of a business insurance broker provides support and advice for working through the challenges, accessing and negotiating insurance markets and cover, and achieving the best possible insurance outcomes.
Key steps in working to achieve optimal business insurance renewals for medium to large businesses are outlined below.
Strong business and broker collaboration to prepare ahead of renewal
Business and broker collaboration to optimise understanding of your business risk exposures and specific changes, as well as critical risk concerns and future needs, provides the key foundations for brokers to engage with insurance markets to shape a fit for purpose insurance program.
The more time you spend focusing on your business needs and with your broker to work on the renewal of your insurance program in advance, the more likely you are to gain an effective result in the challenging insurance market.
For medium to large businesses, building in a longer lead time to prepare your insurance requirements 3-6 months ahead enables preparation of comprehensive supporting information and allows your broker to properly market your insurance program to, and negotiate with, potential insurers.
Reappraise your business insurance strategically and for your current needs
Consider how your business has changed: have you expanded or reduced your locations, added or cut staff numbers, outsourced some functions or invested in or divested yourself of plant and equipment? Do you need additional cover for new exposures and are there some areas that are no longer relevant? Look ahead and take your forward planning needs into account as well.
Documenting your up to date operations and assets will help clarify the policies and cover you require now and over the coming year.
Reconsider your insurance in terms of flexibility and insurer selection
Choosing which insurance policies – and the provisions and limitations of their cover including deductibles that may provide pricing flexibility around premiums and excesses, as well as the levels of coverage – can enable greater flexibility and a more customised insurance program to suit low or high risk appetites across the different risk areas that apply to your business.
The range of insurers, their offerings, underwriting position towards the risks in terms of willingness or constrained underwriting appetite, and the risk assessment approach by the insurer will vary, and it’s important to select the right insurers for your business needs.
Large organisations and those with specific or hard to place risks benefit from broker access to a wide range of insurers from both local markets and overseas, to achieve capacity for some types of risks that may be difficult to place with local Australia-based insurers. Gallagher brokers may provide options from global markets to offer alternatives to support your insurance requirements.
Present your business risk management and risk profile constructively
Providing information about how you manage the risk exposures in your business operations is key for insurer consideration. In a hard market insurers are more selective about the risks they are willing to support, and expect more underwriting information. Providing evidence of how you’re limiting your exposures by documenting your business’s risk control processes, supply chain management and through risk surveys will improve your risk profile.
Working with your broker so that they can present your risk management and insurance needs to potential insurers in a constructive way is highly beneficial.
As your broker we work to secure cover on optimal market terms to provide confidence
How much your renewal will be affected by hard market conditions will vary depending on your risk profile, claims record, approach to risk management and your broker’s capability, but businesses need to be prepared for changes in premiums and other aspects of their insurance renewals.
At Gallagher, we work with a large variety of businesses, with unique risks, challenges and circumstances. As one of the leaders in risk management, we remain fully committed to supporting businesses through uncertain times, to achieve confidence in the solutions for your business risk protection.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
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