Insurance Premiums Rising: 5 Steps to Managing Your Next Renewal

Concerned about increased insurance premiums heading into 2021? Combined critical events including the 2019/20 Bushfire Crisis, COVID-19, and massive losses witnessed across the global insurance market all contributed to increased prices, reduced coverage, the exclusion of specific risks, and lowered policy limits.

With ongoing COVID-19 challenges and severe weather warnings expected to further significant business disruptions well into 2021, the certainty of premiums rising at your next insurance renewal are almost guaranteed.

Fortunately, there things you can do now that will assist your organization manage insurance premium increases at renewal time. Here’s five strategies to consider today, to manage your next renewal:

1. Re-asses Your Risk Profile

Although it can seem complex in its execution, the underlying fundamentals of insurance are not rocket science. Every unique organization faces certain environmental and industry risks that insurers understand based on volumes of historical loss data, and how the organisation represents its management of these risks. Its these same trends that indicate how prepared the insurer is to underwrite.

Do you understand how your unique organizational risks have changed throughout 2020? COVID-19 has affected every organization globally in some way. It could be a change in revenue, profit, supply chain, staff requirements, staff locations, critical functions, and customer bases.

If any of the above seem to have shifted across 2020 for your team, its time you re-assess your risk profile to ensure that your risk scenarios and limits that you were insuring for are still suitable.

Without an updated risk profile you may over or underinsure specific aspects of your program. With the expectation of increased premium prices in 2021, narrowing down to a specific and realistic risk profile can increase your chances of accurately reflecting your organizational needs—minimising the hit taken by your balance sheet.

2. Leverage Technology to Differentiate Natural Catastrophe Exposures

If you have assets or operations exposed to natural catastrophes either directly or through your supply chain, consider a dynamic risk and response plan using active threat monitoring to improve your overall risk profile.

With natural disasters now considered the Top 5 Risks threatening the global environment, the potential devastating effects of climate change are now considered and assessed in every underwriting cycle. To differentiate your exposure to severe weather and natural catastrophes, your organization can now establish active threat monitoring and automated response actions, through platforms such as iluminr.

Systems like iluminr allow organizations to plot and monitor their key locations and automate the first response for natural catastrophe risks before the event unfolds. This demonstrates to insurers that your organization is proactive in managing natural catastrophe risk by managing both asset and business interruption exposures through pre-emptive rapid response.

3. Prepare for Supply Chain Failure

Managing supply chain risk is akin to hitting a continually moving target. As your organization continues to evolve so do your suppliers and their suppliers further still; understanding who your critical suppliers are each year is critical to begin designating contingency strategies in the face of an escalating event.

Read the rest of this article here