Why is the cost of insurance going up?

Charging customers the right premium for the risk we’re covering is a big part of making sure we offer financial protection for the long term.

Given we’re all facing the challenges of a struggling economy, we understand that paying more for your insurance is both an unwelcome and difficult message to accept. That’s why we need to explain why increases are being introduced.

The cost of insurance is not static. It moves up and down in a cycle that reflects supply and demand and profitability. Since 2004, the cost of insurance has generally fallen year on year. In recent years, this has had the effect that the total outgoings have exceeded the premiums collected.

Factors which may impact premiums
Property premiums

• Increasing cost of frequently occurring smaller value claims – impacted by inflation, increased storms and floods, increased cost of some raw materials increased lead time to replace machinery and materials
• Economic climate – the downturn is likely to bring an increase in theft, malicious damage and arson claims.
• Rebuilding regulations – changes in local authority legislation and planning permission requirements, such as energy efficiency and environmental considerations may have time and cost implications.
• Modern methods of construction and materials – changes in construction techniques to protect life rather than property are increasing the number of large losses, particularly fires.

Primecover ‘s financial stability is based on making sound business decisions. Charging our customers the right premium for the risk we’re covering is a big part of making sure we offer financial protection for the along term. We know that you will be looking for value for money and we believe our products give this to you.