We all know the rules when buying insurance:
- never auto-renew, shop around for your insurance and compare your options instead.
- even if you are happy with your policy, regularly review your current cover to ensure you are getting the most appropriate deal.
And while these rules are correct, with certain types of insurance – especially with niche business cover – these rules could end up giving you less options than if you used just one broker.
How business owners arrange their insurance, is this you?
It is a common misconception that to achieve a cost reduction or cover enhancements you should apply standard commercial rules to buying insurance – i.e. getting a couple of prices from a few brokers. The problem is, doing so can actually hinder your chances of getting a favourable deal.
Using more brokers doesn’t always give you more options
The more brokers you get involved the less chance you have that an insurer will take you seriously enough to put time and effort into giving you a competitive quote and ultimately diluting your position in the market.
Why is this?
Calculating your insurance premium can be complex. The insurers will look at many things to calculate the best insurance premium for you. This can include:
- the elements of cover you need
- sums insured required
- your company’s risk profile
- policy wordings
- any previous claims; etc.
Insurers aim to offer cover at a price that is mutually beneficial to both you and them.
This is great if you are approaching just one broker. But if you get a quote from several brokers for the same thing, typically the same insurers are going to have requests for the same quote several times over – because, while you are using three or four different brokers, generally they will be approaching the same insurance markets. This is particularly so where you require niche insurance cover – e.g. fire alarm manufacturing insurance – where there may only be a limited about of insurers providing this cover.
What you may also not realise is that in some cases, there can be nearly as many brokers involved in getting quotes as there are insurers.
In cases like these, because the insurers are so busy, they cannot individually calculate the premium for each request – so they either offer cover at what is known as ‘market rate’ (this is a blanket rate used across the industry that isn’t fixed or calculated) or refuse cover completely.
For you, this means you are potentially not getting the most suitable deal.
But there is a solution.
We have a totally unique new business strategy which gives our clients an element of control over what they pay. If you are interested to lean about how this works and make savings for your business then please call me on 0203 705 3035 to discuss how our strategy can work for you. Alternatively you can message me on LinkedIn or email me: firstname.lastname@example.org