OIA MEMBERS WARNED OF A HARDENING INSURANCE MARKET

After two decades of relatively cheap insurance, the leisure sector is experiencing insurance woes with some premiums more than doubling, or even where insurance is becoming unavailable. On the back of the disruption of Coronavirus and with a potential recession looming, this is the last thing the industry needs.

Why are insurance premiums going up?

The simple answer is that the insurance companies are losing money now and expect to lose even more money. A perfect storm has hit insurers with factors including:

  • Regulatory & legislative changes: underwriters are being forced to double their capital reserves, which makes every policy they underwrite cost them more and the method of calculating injury payments means that serious claims are now double the cost.
  • Investment market failings: insurers used to make a significant portion of their income from investing the premiums they received, the downturn in the market has removed this income
  • More claims and more expensive claims: climate change is bringing unprecedented levels of storm & flood claims, the cost of repairing or replacing property and equipment is increasing, the amount courts award for injury payments has jumped and, even though most policies did not cover coronavirus, the claims that were covered are expected to be the largest loss in insurance history.
  • Reinsurance changes: Insurance companies buy reinsurance to insure themselves; the cost of this is rising and reinsures are limiting what insurers are able to cover.

What does the hardening insurance market mean for the outdoor industry?

Premiums will rise, cover will become less comprehensive, insurers will impose more conditions and restrictions and, in some situations, insurance may not be available anymore. The hard market hit Ireland before the UK and large sectors of the outdoor, leisure and sports industries were faced with unaffordable premiums or even being forced to cease trading because insurance was unavailable.

Gone are the days where insurance companies battled for your premium: they are now picking and choosing who they want to insure and pulling the strings.

How can outdoor organisations reduce the impact?

  • Invest in risk management so you can demonstrate to underwriters that you are a safe bet. Insurers will be interested in almost every aspect of your business from employee and public safety, to risks of fire, theft and flood, to contractual arrangements with customers, staff and suppliers.
  • Work closely with a specialist independent broker that has access to a wide range of underwriters who understand the outdoor industry. You will need to put aside far more time than normal reviewing your insurance, or you could find yourself caught out. Be prepared to go into lots of detail.
  • Start your insurance process early and look at different options that you may not have considered before.

How can Mann Broadbent help OIA members?

Mann Broadbent has been insuring the leisure sector for over 50 years and are proud to be members of the Outdoor Industries Association. We can assist you with advice on risk management and business continuity. Additionally, we are fully independent and not tied to one insurer, giving access to a wide range of different insurance companies, including some polices not available elsewhere. If you would like honest, straightforward help and assistance get in touch with our team on 01905 612336 or email enquiry@mannbroadbent.co.uk