The cost of buying property damage and business interruption insurance in
the food and beverage (F&B) industry has to begun fall, according to a study
of insurance rates and retention levels among Aon¹s F&B clients.
The study, which analysed a sample of 100 of Aon's UK F&B customers, with
turnover ranging from £10m to £20bn, found that for property damage and
business interruption insurance:
* Companies are beginning to see insurance premium rate reductions of 25-30%, in property damage and business interruption cover
* Premium rates went up by 600% on average during 2001 and 2002
* Retention levels also went up by 400% in 2002
* Retention levels began to fall during the first quarter of 2003
Paul Maynard, National Broking Director at Aon Limited, said: "Food and
beverage companies have had a tough time of it regarding insurance costs
over the past few years, as insurers have failed to differentiate between
the individual businesses, and hence risk levels, within the food and
beverage industry."
"This led to the sharp rate increases experienced across the sector as the
insurance markets hardened following the September 11 tragedy."
"2003 has seen the beginning of a reduction in premium rate and retention
levels for companies who are taking steps towards risk improvements, and we
can certainly expect this downward trend to continue into 2004 - welcome
news indeed for the industry."
