Business urged to challenge rises in insurance premiums

Thursday 31st March 2011 1 Comment

Global assurance and risk management consultancy The Lion Partnership is urging businesses to challenge rises in insurance premiums before accepting them.

Partnership New Zealand manager John Prendergast said a clear idea of the impact of recent disasters on premiums would not be known until December 31, the date when the industry globally renegotiated and renewed reinsurance treaties.

In the meantime, businesses should not accept rises without challenging them, he said.

"Premiums are going to increase, but it shouldn't be necessarily through the roof, and it shouldn't be across the board."

Businesses with a good risk profile and a good claims history were an attractive proposition for an insurer, and may still be able to make savings on premiums, Prendergast said.

Global benchmarking showed businesses may be paying on average 22% more for their insurance than they needed to, especially if they were spending $150,000 or more annually on premiums.

Following the Queensland floods and Christchurch earthquakes, many businesses had become more focused on business risk programmes, he said.

Business interruption or continuity insurance was a particular concern, and businesses may be discovering their risks were not covered effectively.

NZPA

Comments from our readers

On 31 March 2011 at 2:56 pm Philip Holdway-Davis said:

The two main reinsurance renewal dates are 31st March and 31st December then to a lesser extent 30th June and 30th September. The insurance industries in Australasia and the South Pacific are on the edge of their seats right now waiting to see what rate increases are in the pipeline for natural disaster cover. John Pendergast might well be right for certain classes of non-property business, but as far as property is concerned you can expect to see a rise in your insurance premiums soon.