Study reveals inadequate coverage, not price, is primary reason for not buying insurance
Insurers are “missing an opportunity” to grow businesses with corporates in the UK as a result of inadequate products.
That’s according to Airmic chief executive John Hurrell, in response to the results of a membership study published today, during the association’s annual conference in Brighton.
The study revealed that many corporate insurance buyers’ primary risk concerns were not adequately covered by insurance.
Supply chain risk was a prime concern for risk managers and insurance buyers, but only half of those who responded had bought cover in this area. The main reasons cited for not doing so were cost, unreasonable data requirements from insurers and the difficulty of establishing the cost of business interruption when making a claim.
Cyber risk was identified as a top-five exposure concern by about three-quarters of respondents, yet less than a quarter actually insured against it. The main reasons given were lack of adequate of coverage and high cost.
“It is noteworthy that three of the four main exposures that worry our members are areas where they find it hard to buy worthwhile insurance,” Hurrell said.
“On the whole it is not the price that puts them off, but the availability of what they believe to be adequate coverage. This would suggest that insurers are missing an opportunity to do a lot of additional business with corporate UK.”
Non-disclosure fears
The Airmic study also asked members what their ‘stay awake at night’ worries were. More than half (52.6%) of respondents cited ‘innocent non-disclosure of material information’ as being one of five aspects of most concern.
One-third of respondents mentioned the closely related issue of ‘warranties and basis of contract clauses’, 42.1% ‘delayed insurance claim payments’, 30.7% ‘difficulties in handling large claims’, 27.2% ‘inappropriate use of reservation of rights’ and 23.7% ‘increase in the cost of handling claims’.
Airmic responded to these results by highlighting its campaign to change the disclosure requirements imposed on insurance buyers. It is using this week’s conference to unveil a new model wording to negate basis clauses.
The survey took place in late May, with 129 Airmic members taking part.
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