Most people have discovered that when it comes to personal insurance, staying loyal to one insurer sadly doesn’t pay off. When it comes to business insurance however, many companies seem to take a more passive approach. There is some sense in this. It is the job of the broker to understand your risks and shop around, on your behalf, finding the insurer with the best appetite for your cover. The FCA however have realised that not testing the market over the long term often doesn’t lead to the best outcomes for the client.

Business Insurance renewal: FCA rules explained

In 2017 the FCA introduced new regulatory rules that require insurers and brokers to;

• Issue Policy renewal terms in good time and in comprehensible form to provide clients with the time and opportunity to shop around.
• Disclose the previous year’s premium on the renewal notice.
• Include text to encourage clients to check their cover and shop around for the best deal at each renewal; and
• Identify customers who have renewed with them four consecutive times, and give these consumers an additional prescribed notice encouraging them to shop around.

Why does the FCA put such emphasis on encouraging consumers to shop around? The obvious answer is that nothing is as effective as genuine competition to make markets work effectively and serve the interests of the consumer.

I’m a latecomer to the world of insurance. It’s a proud and historic industry and there are many elements I love. The regulator does an excellent job of looking out for clients with a strong focus on good outcomes. The truth at the moment, however, is that when it comes to the market operating freely, brokers often place subtle and not-so-subtle barriers to their clients shopping around.

There are many fabulous brokers out there who will deserve your loyalty. A good broker however will accept and embrace the right of their customers to shop around from time to time – I’m sure that happens with your own clients!

Save money on Business Insurance renewal by shopping around

Almost invariably when we find a business that has been with a broker/insurer for many years, we find a company that could make significant savings and often improve their quality of cover. Is this you? If so, why not give Pelican a try? You will find our team a joy to work with. We make everything super easy – allowing you to test the market without hassle or obligation.