Allianz UK is planning to start warning brokers when it thinks small business clients are potentially underinsured from next month, SME and corporate partnerships director David Martin.
The move comes amid growing concerns about underinsurance at small to medium-sized enterprises (SMEs).
Speaking at the inaugural Insurance Times Insuring SMEs event in London on Monday, Martin said that Allianz collects a host of data which allows it to estimate a range of where an SME policyholder’s sums insured should be set.
Martin said: “From next month, we will start contacting brokers where, outside of [that range], it looks like the risk is heavily underinsured.”
He stressed that this did not remove the need for brokers to give advice or for clients to have a proper understanding of their sums insured under a policy.
He said: “We are not going to say [a client] is underinsured. That’s not our role. Our role is to highlight to our broker partners that some of these risks look like they are out of their norm and ask them: ‘Would you like to investigate?’”
“We leave it to the broker to make the decision about whether their client is underinsured or not and to speak to their customers.”
Martin noted that there is increasing concern about underinsurance among SMEs. He said: “Every time I see the FCA, this is number one on the agenda.”
Allianz has already moved to help SMEs avoid underinsurance by abolishing average clauses from its SME policy wordings.
Average clauses allow insurers to cut claims payouts if the client is underinsured.