Unprecedented difficulties faced many firms during this season’s round of insurance renewal. Yes, they were mainly small firms, but some larger firms had problems too, and it may not be long before even large international firms start feeling the pressure too.
We need to be wary of assuming there is one single cause or one simple answer. Many have latched on to a single issue as being the cause, or a single solution as being the answer. The single renewal date is a problem, and it should be reviewed, but it is not the sole cause.
If a typical small firm does conveyancing, pays a premium of, say, £25,000, has one claim per year, and the average lender claim costs, say, £50,000, it is not hard to see why an insurer might not find the proposition attractive, even though the firm is well run, and its claims record is better than average.
The example is hypothetical, but illustrates the problem.
Insurers can only realistically make money from small firms if they have a large scheme for small firms, but they risk catching a large
