Easy hack to reduce your insurance premiums

“Past performance is not a reliable indicator of future performance.” The ubiquitous disclaimer attached to financial services marketing. Despite this, past performance is usually precisely how insurers determine insurance premiums. Anyone that has been involved in a business insurance renewal process would know that the first thing a broker or insurer asks for is your claims history.

In the insurance world, the market is as hot as ever for ‘good businesses’. Put simply, a ‘good’ business is one that pays more premium than it costs in claims over a long period of time. The best businesses being those that never make a claim!

Actuaries (and now AI!) take in to account any number of variables to predict if your business is going to generate more revenue than claims and will adjust the premium they are prepared to offer you accordingly.

The reality however is that we have insurance because things go wrong. We outsource or transfer some business risks in order to protect against big losses in the same way we buy insurance for the house we live in to protect against a fire. This is true for all businesses and this is where you can benefit.

Sure, a business that hasn’t had a claim over a long period of time is going to be offered the best rates, however insurers know that they can not build their book with these customers alone, and so the race for the next tier of businesses beings. In today’s competitive insurance market, brokers and insurers are actively seeking well-managed, low-risk businesses and they’re often willing to offer more competitive terms to secure them. What Does a “Good Business” look like to insurers? To be seen as a low-risk, high-value client, businesses need to demonstrate proactive and structured risk management. This includes:

🛡️A robust and actively managed risk management system,

📝Well-documented systems and operational processes,

🏆Comprehensive staff training and a culture that prioritises prevention over reaction.

When insurers view your business as well-managed and low-risk, you gain leverage. That increased confidence leads to:

📉Lower premiums

👌More favorable policy terms

🔍Access to a broader range of insurance products

Simply put, a stronger risk profile makes you more appealing to a wider pool of insurers, increasing competition for your business and improving your overall insurance position. Improving internal systems doesn’t need to be complex or resource-intensive. Even modest enhancements to risk oversight, training, and documentation can have a noticeable impact.

Reach out to ⚡Virtus Advisory⚡ to get started.