Our continuing help for readers this month includes special advice from Oyster Risk Solutions. Oyster have worked with locksmiths for a number of years and understand your needs:
How downturn affects your insurance premium – and how we can help.
No industry is immune from the effects of the credit crunch, and the insurance sector is no exception. Since 2005, rates for most types of insurance policies have reduced, although some premiums may have increased to reflect business growth.
The cumulative impact of these rate reductions however has affected the results of the major insurers, leaving the industry in a position where the cost of claims and expenses are exceeding the premiums paid. Past shortfalls have been covered by reserves but as interest rates fall so do these resources. The total sum of this is a likely premium rate rise from 2009 to balance up the figures.
Each insurer will have its own plan, but most look at each customer and make a decision based on a combination of past claims, their risk profile, the claims trend for their particular business sector and class of business. It is impossible to predict these rate rises but expect to see around 5% added to your premiums, although not all customers will be affected. For customers who are seeing a downturn in income reduced premium rates may apply.
There is still fierce competition between insurers for the ‘better’ class of business – although less so than the past few years. This is because some insurers have deliberately reduced the amount of business they handle, or become more selective of those risks they insure.
Meanwhile, we’ve become very wary of the financial security of some insurers who are based abroad – a position prompted by the problems encountered by US based insurer AIG.
Many brokers have reduced their portfolio to a few well chosen insurance companies with a good sound track record and reserves to cover their claims. Although in this climate nothing is 100%. It is strongly recommended that you use a reliable broker ‘Member of the broker network’ like Oyster to handle your business and negotiate with insurance companies. We are strongly based in the locksmith sector and can help establish good contacts even with your existing insurers.