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Hard Market - What does it mean for you?

Insurance Market Update

The insurance market has undergone a significant transformation since 2018 with increasingly difficult market conditions experienced across most classes of insurance and no signs of the situation easing in the short term.

But what is the cause of the ‘hard market’ and what can be done to minimise the impact?

What has caused  the hard market?

The traditional insurance cycle of ‘hard’ and ‘soft’ market conditions has changed in recent years and since the early 2000’s we have experienced an unusually long ‘soft’ period of trading – an abundance of insurer capacity resulting in increased competition, broad insurer appetite for risk and lower premiums.    However, recently a combination of various factors has impacted insurers including:

  • Severe losses caused by UK based storms and flooding
  • Increased scrutiny of historical construction materials (composite panels, Grenfell etc)

Changes to the Ogden Discount Rate – changes to the way severe injury compensation claims are calculated – as well as general claims inflation

  • the increased burden of regulation by the Financial Conduct Authority
  • lower investment income returns putting more pressure on underwriting profitability
  • increased reinsurance costs impacted by a number of global factors such as catastrophe losses and political uncertainty
  • The implementation of Solvency II, legislation which requires insurers to hold larger capital reserves, consequently making it more difficult for new entrants to the market
  • The impact of Covid 19 on the industry – the widely accepted estimate of the negative impact of the pandemic was around £4bn

What should I expect from a hard market?

The hard market will include some of or a combination of:

  • Significant increases in premiums – this could range from double digit increases to multiples of premium
  • Increased policy excesses and reductions in limits being offered
  • Reduced number of insurers willing to quote as some withdraw from certain sectors
  • Less flexibility and more restricted risk acceptance criteria from insurers
  • A reduction in the level of service provided by insurers as a result of referrals and quote activity.


What can you do to assist?

  • For Corporate clients begin the renewal process early, at least three months before renewal date – decide on your strategy with your broker. It is definitely not in your interest to get multiple insurers / brokers involved – a targeted approach with your current broker and potentially one other is the best approach.
  • Provide as much risk information as possible, for example premises construction and security details, Health & Safety policies and procedures and highlight other risk management features
  • Budget realistically

 

What can TL Dallas do to help?

TL Dallas expect these difficult market conditions to continue for the foreseeable future.  However, we continue to be pro-active, seeking the most favourable terms for clients based on extensive market knowledge and strong insurer relationships, meaning we continue to be best placed to help clients weather a hardened market for the short, medium and long term.

Feel free to contact one of our account executives for an exploratory conversation regarding your requirements.

“TL Dallas has provided trade credit insurance for the last 10 years, which has bought great peace of mind, whilst supporting the company’s growth. The TL Dallas team ensures that ACS can secure credit insurance cover for new and existing customers, as well as giving the best advice on slow payers and claims. They have recently helped with an appeal regarding the payment of a claim, helping with cash flow. The pride they take in their work is truly inspiring going above and beyond. Thank you for everything you have done and continue to do for ACS."
Leanne CleghornACS Technology Group Ltd
“We have dealt with TL Dallas for many years and have always found the staff to be very helpful and professional in all that they do. They are able to provide specialist knowledge and a bespoke service tailored to our specific needs, and the fact that they have an office on Shetland is a huge positive.”
Gary SpenceLHD Ltd - Lerwick
“Truly a job well done and really appreciate all the discussions on our behalf.”
“I have been most impressed by the customer service from TL Dallas when a problem was discovered in the bathroom of a property which I own, and which is rented out. They were very patient when personal issues caused a delay in a quote coming to them and again when there was a delay with the invoice. We also couldn't be more delighted with the swift payment of our claim by the claims handling team at Aviva.”
“Just a brief note to say how grateful I am for all your help sorting out the hotel policy this year. Over the years I have valued your cooperation in getting not only the most appropriate cover but at the best price.”
“I immediately recommended TL Dallas given the experience and the excellent service levels we have enjoyed at our company.”
“Three generations of Whitby Morrison have worked with TL Dallas for insurance needs. The support and service received just gets better year on year. The team are always on hand to offer guidance and advice whilst scouring the market for the perfect balance between price and product.”
“As a business we have worked with several members of the TL Dallas team, and yet it always feels like you’re dealing with the same person. The transition is always seamless, and their customer knowledge is second to none. As a client, you really do matter to them.”
"Whether you’re an established business, just starting out, publicly or privately owned, TL Dallas will take care of your every need, product, and price.”
Ed Whitby
“I just wanted to say once again how impressed I always am with your team – no matter who I speak to – and I think that’s very special. Your team are always excellent with their service and we always tell as many people as possible about you! I just wanted to pass this on, as you are clearly doing something very right and have been for a long time!”
“Thank you for your excellent service over the years.”
“Thank you so much for all your help and ongoing advice. It is so good to have someone advising us who is local and has so much understanding, not only of the business, but all the other influencing factors, as well and who totally understands what our business needs.”
Mary SharpShetland Control Systems Ltd
“TL Dallas has offered us consistent, transparent, and clear advice over the years. A trusting partnership was established from day one and we feel assured that we have value for money alongside the cover we need, which in turn gives us peace of mind.”
James RycroftManaging Director, Vida Healthcare.
We have been dealing with TL Dallas for over 30 years and have always found them to be efficient. They have created insurance policies that are tailored to our needs, which has helped us evolve the company. Like every business, you only find out how good an insurance company is when you need to make a claim. This has been effortless when this has occurred and I strongly recommend TL Dallas for your insurance needs.
Peter DurkinManaging Director, Mini Gears (Stockport) Ltd
We are so grateful that you helped to resolve a situation that was causing us great concern. After being badly let down by our previous insurance provider, and after seven months of emails, phone calls and lost documents, we decided to try elsewhere. After only one week of contacting TL Dallas, we had our policy sorted and at a much lower price, which in this current economic climate makes a huge difference to us. Your professionalism and knowledge of the Social Care Sector is second to none and we are so pleased that we took the decision to move to TL Dallas. We will definitely be recommending TL Dallas to our colleagues within the care sector, and we look forward to a long and enduring working relationship as we move our business forward.
Phoenix Day Care CICAdult day care provider
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