The gross written premium for general insurance jumped 8.7% in the 2020-21 financial year. This includes commercial policies. With such a hardening market for premiums, how can you minimise the anticipated premium rise this financial year?

Why your Home and contents and investment property insurance premiums increase?

Insurers calculate premiums by reviewing the risk factors of your business as well as those in the broader economy. Many reasons underpin the premium price rise, even if you haven’t recently claimed on your insurance. Those factors include:

• Inflation
• Changes in taxes, duties, or levies, whether from local, state, or federal governments
• A change in your business operations that affects your risk, such as installing a CCTV-alarm system to reduce theft and vandalism
• The influx of claims from natural disasters
• A deluge of claims from other policyholders in your sector
• Insurers’ investment returns
• Changes in the quantity or value of what you’re insuring.

As well, insurers’ costs are very cyclical. There may be regional and global changes impacting the price and availability of reinsurance. That’s cover insurers take out to protect themselves against their exposure to the risk of disasters or other significant events. So premium changes reflect the insurer’s cost of doing business.

Cost to replace your property may have changed?

Building costs to replace your property may have increased since your property was built, especially once you consider the new replacement cost of builds that now reflect a substantial increase in the cost of supplies like timber and steel, and the demolition costs of a property if it does suffer a fire, eg, demolition and cost of replacing the slab for eg.

Improve security measures

It makes sense if your business puts in place measures to reduce its risks. This will lower the risk of you claiming on your insurance. In this case, insurers are more likely to agree to a lower premium.

Try these measures:

• Install or upgrade your existing alarmed security system for your premises
• Boost your cybersecurity protection
• Invest in extra security for your high-value goods such as laptops, stock, money, etc such as by locking them up or storing them out of sight overnight
• Considering having panic button options for your security system
• Install a sprinkler system in your office, warehouse or other production areas and other fire detection functionality
• Develop a system to periodically review your risk assessment, incidents, accidents and near misses to fine tune your risk minimisation strategy.

Minimise risks

Keep your staff updated with their work safety training, and program regular refreshers. As well, make your mark on the workplace culture by encouraging healthier behaviours such as a no-smoking policy, offering perks such as on-site yoga classes or gym memberships. These moves could indirectly impact upon the wellbeing of your staff and therefore reduce health-related workers’ compensation claims.

Lock in your premiums for the year

If your cashflow allows, pay your insurance premiums annually rather than monthly. Paying yearly saves you up to 8%; half-yearly, up to 3%. However, not all insurers penalise you for paying monthly; we can check the difference for you at renewal time.

Regularly evaluate your policies

Get into the practice of reviewing your policies at least quarterly, and when you:

• Experience a significant change in your circumstances, such as taking on less risky or riskier projects
• Your business is on a growth trajectory
• Make substantial capital purchases, including business equipment and vehicles
• Your business operations change
• Your hire/lose staff.

You could save money by updating your insurance cover. For example, if your revenue is slimmer than expected, then updating your policy accordingly could earn you a part-premium refund.

Give these ‘nips and tucks’ a go to ensure your insurance cover is the best fit and you’re not paying a higher premium than needed. Be sure to reach out to us for further guidance to customise your policies to your current circumstances. Often, bundling your insurance policy in a package through us will deliver an extra discount. That’s a great move to ensure your policies don’t overlap.

You’re now up-to-date on how to minimise your hit from the anticipated premium increases. Time to update us.

 

We have many clients whom have had a great experience with Shortland Insurance Brokers to support their home and contents and investment property insurance policies as well as business insurances for small business owners.

To reach out to Lonny Hawkins and his team – Contact – Shortland Insurance Brokers Central Coast

Contact Shortland Insurance Brokers Pty Ltd
Level 2, 27 Dane Drive
Gosford NSW 2250
Australia
• Phone: 02 4324 5244
• Email: lonnyh@shortlandinsurance.com
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