We have had a lot of rhetoric from industry leaders, saying that premiums charged, particularly when getting a business insurance quote need to increase. We have had years and years of increasing claims, reducing investment income and increased competition driving rates down. On top of this we have had the UK recession which has caused, in our estimation, a 10% drop in commercial gross written premium.
None of this has had a real affect on the rates being charged. Insurers are still fighting for business, there is more of a concerted effort to charge higher premiums but this is not consistent. If an insurer holds a piece of business and are faced with the prospect of losing it, they do tend to capitulate on price.
But, we are already seeing a significant number of claims coming through this week. Buy to let insurance is one area where we are seeing burst water pipe claims being submitted on a daily basis.
This is starting to spread though and we are getting water damage claims of all sorts for all types of policies, particularly our hotel insurance packages.
On the news last night there were stories of significant claims in the farming community for collapsed buildings due to weight of snow.
Over the past few years insurers have been very lucky throughout the mild winters with claims level very low. This has now changed and maybe, this will give them a big jolt as they realise that uneconomic pricing cannot continue.
Time will tell of course, but maybe this cold snap is the thin end of the wedge.