As with most financial services, commercial insurance providers spend more money gaining new customers than renewing old ones.
Most policies are annually renewable, therefore insurers want to insure a business not only for the first year but the second, third, fourth and so on.
The difficulty that they face is, just the same as you were once “new business” to them, you can look around and become a new customer to someone else.
You would hope therefore, that if you do not look around and are happy to renew with your existing insurer that they may make you a special deal to keep your business. This, however, is not always how things pan out.
When looking for a business insurance quote, you may go to two or three different companies. When one of them gets your business they don’t necessarily rule out price increases in years 2, 3, 4 etc.
The basic principle of insurance is that the premiums of the many pay for the claims of the few. Eventually, your time will come for a claim and you will be paid out. But, insurers have been suffering from years of increased competition, increasing claims costs, reduced customer base (because of the recession) and reduced investment costs. They need to raise their revenue and the only way they can do this is with their extremely wide “broad brush”.
Everyone’s prices go up, whether you have been with them for years and years claims free, you will still have to pay more.
There is a silver lining though, if you look carefully and speak to a good business insurance broker, you will be able to find a better deal. The deals are out there, it is just a case of finding them.