A significant number of the negative experiences businesses have with insurers comes down to the complexity of policies, sometimes leading to accidental underinsurance. To fight situations like this, Aviva has announced a range of streamlining measures to its policies that will be rolled out by the end of the year.
Speaking with
Insurance Business UK, Gareth Hemming, director of SME commercial lines at Aviva, said the changes are designed to give both customers and brokers more confidence the products they buy and sell are going to operate as expected.
The policy changes start with Aviva’s Shop and Salon, and Office and Surgery, both of which are packaged business available on Fast Trade and imarket. For these products, the value contents and stock insured have been combined into a single figure. Hemming said this is to protect people who have made sure their total insured amount is correct, but may not have divided its value correctly.
“That seems a bit unfair really, when people have got the right level of cover in total, so what we’re doing is joining those two things up and saying ‘provided you’ve given us the right total in aggregate, at time of claim we won’t take into account the split you’ve given us’.”
The rule of average has also been removed from the policies, meaning an insurance pay out won’t be proportionate if a company is underinsured. In addition, Aviva has also increased the overall property sum insured on these policies by 20%.
Hemming said this is helpful for smaller businesses that grow quickly after being initially insured.
“If you’re in a small business it’s amazing how quickly buildings, contents, stock insurance and other things can get out of date as your business grows or changes,” he said. “The last thing in those customers’ minds mid-term is increasing their sums insured.”
There has also been an increase to business interruption cover and indemnity period, and public and products liability cover has been boosted from £2 million to £5 million.
Hemming said these changes simplify policies and should help Aviva’s brokers explain them to customers more easily.
“Because of the way we are treating sums insured and the way that we are trying to make sure that the policy gives plenty of cover in the points where it’s needed, it should give brokers more confidence in placing their customers with us,” said Hemming. “In placing their customers with us they’re placing them in a product that is going to work very well for their customers. That in itself gives confidence to brokers.”
While the changes are in line with the Insurance Act, they weren’t necessarily made because of it. Hemming said Aviva has an internal policy about reducing complexity.
“We were fairly instrumental in lobbying for the Insurance Act,” said Hemming. “It’s difficult to say they’re not connected, but one hasn’t directly led to the other. It’s part of our ethos of simplifying things.”
Be the end of the year all of Aviva’s Fast Trade and imarket products will have either these or similar changes applied.
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