Why are insurance premiums going up for sport & leisure?
And how can you keep your premiums down?
For almost 20 years insurance premiums in the sport & leisure sectors have been stable or even getting cheaper. However, in recent months the market has hardened to the extent that some policyholders are seeing their premiums double, treble or even almost impossible to obtain cover.
So why are insurance premiums increasing in the sport and leisure sector?
A number of different things have come together at the same time to force insurance companies to put their prices up:
- Regulatory & legislative changes
- Insurance companies now have to double their capital reserves making it more expensive for them to provide insurance, Lloyds regulators have instructed syndicates to stop providing cover to higher risk sectors and the calculations courts use to award payments to injury victims have changed, doubling the size of large awards.
- Increased number and size of claims
- Climate change has brought large scale flooding and storm damage, buildings & equipment are now more expensive to repair or replace, the average payment awarded for injury has increased significantly and even though very few insurance policies covered Coronavirus, the claims that were covered could be the largest insurance loss in history.
- Low investment returns
- Traditionally insurance companies have made money from investing premiums; the poor performance of investments mean that this income stream is drying up.
- Reinsurance pressures
- Insurance companies insure themselves with reinsurance which his jumped in cost; reinsurers are also limiting what they let insurers insure.
What does the hard market mean for the sport and leisure sector?
Insurers are now picking and choosing who and what they insure, putting premiums up and imposing restrictions, limitations and conditions on the cover they provide. The hard market started earlier in Ireland where some activities such as soft play centres, trampoline parks, outdoor activity centres and even rugby clubs struggled to obtain cover. Even mundane sport and leisure organisations found obtaining adequate cover at an affordable price difficult.
How can sport & leisure businesses and clubs handle the hard insurance market?
- Start the renewal process early: underwriters will be very busy and very demanding
- Use an independent broker that has access to a wide range of underwriters and a good understanding of the peculiarities of the sport & leisure sector
- Work closely with your broker and be prepared to spend a lot of time with them discussing your organisation and considering options
- Invest time & effort into improving your risk management.
If you need help facing the hard insurance market, then speak with our team of specialist sports and leisure insurance brokers – we understand the unique requirements of your sector and have close working relationships with specialist underwriters. So if you are looking for independent, honest, assistance with your business give our team a call on 01905 612336 or contact us.