More and more occupational groups are (temporarily) uninsurable. The business claims market is going through major developments and is looking for a new balance. Due to a sharply reduced supply and increasingly complex needs, a mismatch is increasingly arising. One that will not be solved for the time being. This is shown by the IG&H Performance and Distribution Monitor.
Since the big blow in the sector ten years ago, insurers in the business claims market have been struggling with their positioning. Which target group do they want to serve and, for example, do they work with authorised agents or not? Until there is clarity about the price, the supply side is strongly standardized to limit risks. As a result, our monitor shows, the sector is effectively standing still in its development.
Conflicting developments
The sector is faced with a mismatch between supply and demand. On the one hand, the complexity of customer demands increases. What used to be a simple risk is changing into a complex risk due to demographic, ecological and technological developments.
At the same time, the range of products offered by insurers is shrinking and even more standardized, among other things through new data solutions which should exclude risks. Although these can have a positive impact on financial performance, they also increase the number of uninsurable groups. This resulted, among other things, in reports in the news about taxi drivers and waste processors. The monitor also shows that, for the first time in a long period of time, independent advisers are not as good at assessing the services provided by insurers in the commercial property-casualty market.
Finding balance is not possible without a fight
Insurers will have to break this trend. In the future, the market will have to move back to a new balance in which customer and insurers share the risks. IG&H sees three different options; hyper focus on niche specialisation, an increase in scale or expansion of the service. Finding a new balance will be gradual, but it will be tricky, since certain professional groups are (temporarily) difficult to insure.