UK Budget 2010: Insurance Premium Tax hike and rate increases to follow
Wednesday, 23 June, 2010 Leave a comment
Bad news for UK business but this may only be the start! You may get the impression from the following that it is only a matter of time before insurance premiums rise and you would be right. Responsible brokers will already have warned their clients to be prepared because they recognise the value of communication in a genuine business relationship. Particularly in such a difficult trading climate.
Unfortunately, many (some would say most!) “intermediaries” will not be so forthcoming. They will leave it as late as you will let them because it is in THEIR interests that they leave you little or no time to seek alternatives AND that they retain your business at an increased premium. Of course there will be the usual empathising and rhetoric but, at the end of the day, this is the time that many brokers (and insurers) have been waiting for. The time when aggressive growth strategies, aimed at capturing market share, start to payoff. DON’T ALLOW THEM TO “PLAY YOU”.
If you want VALUE insist that the pre-renewal process commence at least 2 months prior to expiry of your existing cover and that a thorough review of your current cover, future needs and past claims – ask for a claims print out for the last 3/5 years for each policy – is carried out. YOU set the deadline for their response and I would recommend at least 3 weeks prior to expiry…if you are not happy with what they offer you may need that time but, at least you will have all the information you or another broker will require to help you.
Assess their proposals based upon more than price. Consider terms, conditions, excesses, insurer security, claims handling and the service that the broker provides – do they offer agreed service standards?
ONCE YOU HAVE ALL OF THAT REMEMBER that you are entitled to ask them to detail their earnings. What commissions are they receiving from the insurer?
They are obliged to tell you and, once they have, you can judge for yourself if the service they provide is worth the money and whether any empathising was sincere. You could be in for a BIG (and nasty) surprise but, by adopting this approach, you may just secure the means to “soften” or balance the impact of rating increases at a time when your business needs it most!!!
I am happy to provide a personal and impartial opinion too.
Post Magazine: Bluefin CEO Stuart Reid has admitted a more significant increase in insurance premium tax may have further delayed a hard market.Commenting on the changes to insurance premium tax, Mr Reid said: “While we would have preferred Insurance Premium Tax to remain fixed, the standard rate rise from 5% to 6% will be welcomed by many, especially as there had been much speculation that it could have risen as high as the new VAT rate of 20%.“Clients will be pleased for obvious reasons. Insurers will breathe a big sigh of relief because a more significant increase would have put pay to any ability to influence premium rates upwards, something not yet happening in many areas but which will be needed sooner rather than later.”
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