Housing associations in a hard insurance market need a strategy to face the challenges of rising insurance premiums, limited coverage options, and where insurers are more stringent in their underwriting practices. To navigate this environment effectively, housing associations can employ various tactics:
- Risk Management Practices:
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- Strengthen your risk management programs to demonstrate to insurers that you are actively working to minimise potential losses. This can include improving safety measures, implementing preventive maintenance, and conducting regular risk assessments.
- Loss Prevention and Mitigation:
- Housing associations in a hard insurance market can focus on loss prevention and mitigation strategies to reduce the frequency and severity of claims. This can include fire safety measures, security enhancements, and disaster preparedness plans.
- Claims Management:
- Implement effective claims management practices to minimise claims and associated costs. Timely and efficient claims handling can help maintain a positive relationship with insurers.
- Broker Relationships:
- Collaborate closely with insurance brokers who specialise in your industry. They can help you navigate the hard market, negotiate with insurers, and find the best coverage options.
- Alternative Risk Financing:
- Housing associations in a hard insurance market can explore alternative risk financing options such as self-insurance, captive insurance, or risk retention groups. These can provide more control over your insurance program and potentially reduce costs.
- Risk Pooling:
- Consider joining or forming a risk-sharing pool with other housing associations or similar organisations. Pooling resources can lead to better negotiating power and more favorable terms with insurers.
- Diversify Coverage:
- Review your insurance portfolio and consider alternative insurance products or providers. Sometimes, different insurers may have varying appetites for risk, so it’s worth exploring multiple options.
- Higher Excesses:
- Adjust your excess, if possible, to lower premium costs. However, be cautious not to set them so high that they become financially burdensome in the event of a claim.
- Loss Control Programs:
- Invest in loss control programs, which may include training staff, conducting safety audits, and implementing risk reduction measures. This can help convince insurers of your commitment to risk management.
- Benchmarking and Data Analysis:
- Utilise data analysis and benchmarking to demonstrate your association’s favourable loss history and risk management practices to insurers.
- Long-Term Planning:
- Develop a long-term insurance and risk management strategy that accounts for market fluctuations. This may involve multi-year insurance policies or other strategies to lock in favourable rates.
- Compliance and Governance:
- Ensure that your organisation complies with all legal and regulatory requirements related to insurance and governance. Good governance practices can inspire confidence among insurers.
- Communication:
- Maintain open and transparent communication with your insurance providers. Discuss your risk management efforts, loss history, and any changes in your organisation that may affect your insurance needs.
- Advocate for Industry Interests:
- Collaborate with industry associations or advocacy groups to collectively address insurance market challenges and lobby for more favourable conditions for your sector.
Remember that navigating a hard insurance market can be challenging, but one or more or a combination of these tactics for the housing sector in a hard insurance market can help. It’s also important to stay informed about market trends and adjust your strategy as needed to adapt to changing conditions. Working with experienced insurance professionals and risk management experts can be invaluable in this process.
Alphatec’s ClaimControl can help you manage your insurance claims efficiently and prove to your insurance provider that you are managing risk, managing claims and learning from your data. If you would like to know more about our claims management platform, then please do get in touch. We have several housing associations successfully using our software for claims, disrepair claims, complaints and legal cases. Get in touch to know more.