A new broker survey revealed that an increasing number of businesses in the UK are either cancelling or altering their insurance policies due to the current economic uncertainty and the costs associated with coverage and protection.
Over three quarters (79%) of brokers said that they are seeing changes or cancellations made to insurance cover, according to RSA Insurance. Over half (54%) attribute this to uncertain economic factors, with 42% of respondents also believing that this uncertainty will continue in the next 18 months.
The most altered policies, according to the survey, are property at 27% and employers’ liability (EL) at 26%; findings for the latter are in line with another recent study that found that over 160,000 SMEs will lack EL insurance by the end of the year. Property and EL are typically among the last optional elements of insurance cover that businesses discard. However, the study also found that many businesses have also dropped other optional policies such as personal accident insurance, a testament to the severity of the current economic situation.
Despite the challenges posed by the economic downturn, four in five brokers agree that they are well-equipped to support clients in navigating these concerns. Adding to this, 85% of respondents said that additional insight and knowledge from insurers to understand the current macroeconomic landscape will go a long way for them and their clients.
RSA Insurance commercial lines managing director Lee Mooney said that the survey’s findings reinforce the fact that businesses are feeling the heat from the current economic climate.
“It’s worrying that some businesses are resorting to reducing or cancelling insurance cover, as this leaves them more exposed to any unexpected financial shocks that may arise. As an industry, we must continue to support businesses as much as we can, and a significant part of this involves working with brokers to provide them with the necessary insight to help them and their clients navigate this period of uncertainty,” Mooney said.
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