Insurance premiums, both for personal and business coverage, are anticipated to remain elevated in the foreseeable future, as highlighted by a UK insurance specialist and coming on the heels of widespread reports of soaring insurance costs for electric vehicles.
Professional indemnity (PI) cover provider Trafalgar Risk Management issued a warning indicating that insurers have been making substantial claims payments in recent years, and this trend is expected to persist. The broker emphasises that even if inflation begins to recede, the issue of rising insurance premiums will not reverse immediately.
In recent years, insurance premiums spanning private motor cover to professional indemnity insurance have continued to surge. Despite hopes within many families and businesses for a shift from a hard market to a soft one, where prices would decrease, they have been cautioned not to anticipate this change too soon. Escalating business insurance costs have been implicated in the struggles faced by small businesses.
Trafalgar managing director Kelvin Wheat said that the costs that insurers are now meeting across all kinds of sectors are not going to fall, and that everyone will have to cope with continuing inflationary pressures that are not going to disappear anytime soon.
He added that even while inflation is under pressure to fall, its fall will not mean that it is going away. Wheat also cited that despite exceptions to the rule, such as premium drops in the cyber sector, it is not representative of any kind of trends.
“Unfortunately, I think it's very strongly arguable that there is no real reason, incentive or logic to insurers applying rate reductions of a significant nature for the foreseeable future. I really cannot see it happening,” he said.
Relevant to premium rises is a recent whitepaper from reinsurtech Supercede, which attributes the trend to the silent crisis of unreliable reinsurance data and the costly implications for cedents.
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