Perkins Slade chairman criticises insurers for failing to help harden the market
Perkins Slade chairman David Slade says the global financial crisis has left current insurance market conditions in “as dire a situation as I can recall”.
Slade, who was interviewed by former Axa chief executive Peter Hubbard at the Insurance Times’ Broker Forum held at the Bridgewater Hall in Manchester last week, also criticised certain insurers for failing to help harden the market.
The bold statements came as Hubbard admitted he feared for the future of the consolidator model, describing it as “fundamentally flawed”.
Slade told delegates: “It’s pretty tough. We have gone past whether it is a soft market or a hard market. Customers can’t afford to pay or are just not prepared to pay. People are now ceasing to insure the risk because they can’t afford the premium. It is as dire as I can recall.”
He also revealed how the commercial market was suffering as a result of businesses becoming insolvent or being sold.
“In June alone we lost £1.25m of gross written premium [GWP] from three customers – two were sold, the third went bust. Now, can anyone out there tell me where I am going to get £1.25m worth of premium to replace that? It is grim, grim, grim. It really is.”
Despite some insurers trying hard to get rates up, he said there was still “huge pressure” on brokers and insurers would inevitably lose business as a result.
“There is no consistency. As a result they lose profitable business,” he said. “It is nonsense to talk about the market hardening.”
However he applauded new entrants that brought “good security and sound management”.
But he also accused insurers of shying away from paying claims.
“The ones who don’t want to pay are finding lots of new reasons not to pay. It is not good for the industry if claims is about the best advertisement we have.”
Hubbard told the forum how he expected consolidators to become unstuck. “There are a lot of consolidators out there. People who bought businesses are going to go tits-up in the next 12 months to two years because they won’t be able to meet the requirements of providing any return to their investors. It’s a huge issue for us.”