Brokers across the UK continue to express concerns over underinsurance among their clients, a situation highlighted in Aviva’s recent Broker Barometer survey.
The study reveals that three in four (73%) brokers worry about clients being underinsured, with inflationary pressures cited as a primary cause. This concern ranks second only to insurer service among the market challenges brokers face.
Despite optimism about potential business growth, with 83% of brokers anticipating moderate to strong growth for their businesses and 80% foreseeing similar prospects for their clients, Aviva highlighted underinsurance persisting as a significant issue.
Meanwhile, the survey indicates that only 24% of brokers report that clients have adequately increased their insurance sums in response to inflation.
Jason Chambers, director of innovation at Aviva, noted the evolving challenges of underinsurance and its effect on insurance brokers and their clients.
“The underinsurance challenge for brokers has evolved,” he said. “A few years ago, brokers were being urged to educate their customers on the impact of inflation and supply chain issues on their sums insured and indemnity periods.”
Chambers explained the importance of the broker-client relationship, particularly in a cost-cutting business environment, emphasising the need for regular engagement to ensure businesses are adequately protected.
The report also touched on the adequacy of indemnity periods in business interruption insurance, noting that only 25% of brokers believe their clients have sufficiently adjusted their indemnity periods to account for supply chain disruptions.
Aviva has responded to the need for more data-driven insights with a new quotation tool that leverages Named Entity Recognition and GenAI to analyse broker commercial SME presentations.
The company explained that this technology not only identifies gaps in coverage but also speeds up the quotation process, addressing over £800 million in property underinsurance across 2,000 risks.
“To support brokers, Aviva continues to invest in digital solutions, from a trading and self-service perspective,” Chambers said. “Furthermore, Aviva’s regional underwriting teams can support brokers by identifying those vulnerable clients due to underinsurance. The results underscore what can be achieved when insurers invest in people alongside digitising workflow.”
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