Firms alter cover amid economic uncertainty

Economic uncertainty remains the greatest concern for British businesses, according to the Broker Pulse survey from RSA Insurance.

This was the view of the majority of brokers surveyed (54%), who envisaged little sign of the trend abating for the next 18 months.

Additionally, the survey shows that the cost of doing business remains a significant concern. As a result, over three quarters (79%) of brokers said they are seeing changes or cancellations made to insurance cover.

The two most commonly altered policies are property (27%), and employers’ liability (26%). Property and liability insurance are typically among the last optional elements of insurance cover businesses discard, due to the potential cost of property damage or liability claims. However, with RSA’s previous surveys suggesting that many businesses have already dropped other optional policies, such as personal accident insurance, these latest findings demonstrate how stretched firms are by the ongoing economic crisis.

Despite these challenges, and the increase in policy alterations, more than 80% of brokers agree that they are generally well equipped to support clients in navigating these concerns. However, operating in such a fast-paced economic climate, 85% of brokers feel they would benefit from further insight and knowledge-sharing by insurers to understand the macro-economic landscape and inform long-term planning for their clients.

Lee Mooney, managing director, commercial lines at RSA Insurance commented: “The findings of our latest Broker Pulse reinforce that businesses are feeling the pinch of the economic crisis. It’s worrying that some businesses are resorting to reducing or cancelling insurance cover, as this leaves them more exposed to any unexpected financial shocks that may arise. As an industry, we must continue to support businesses as much as we can, and a significant part of this involves working with brokers to provide them with the necessary insight to help them and their clients navigate this period of uncertainty."

Political uncertainty and supply chain disruption were the subsequent top concerns for British businesses, according to the survey.

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