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- An early start and concise strategy are critical for navigating the renewal season.
- Without adequate preparation, buyers often find themselves confronted with higher premiums and fewer coverage options.
- Insurance renewals can be challenging, but with the help of technology it is easier than ever to stay on top of your data on assets, risk exposure, and policy changes.
Insurance renewals can be challenging. If your business is due for an insurance renewal, now is the time to start shopping around. Thanks to technology, it is easier than ever to compare rates and coverage options from different insurers. With so many choices out there, it can be tough to know where to start and how to choose a product that fits your needs. Here are a few tips to help you get the best deals this renewal season.
Common challenges of the renewal season
Insurance policy renewal is one of the most important tasks in specialty insurance. While securing new coverage is something buyers do once in a while, the annual renewal process must be followed up closely to ensure that the existing coverage remains valid and active over time.
Companies navigating the renewal season may face some challenges, like the rising of premiums and rates, making it harder to know whether or not their current plan is still suitable or reasonable for their specific needs.
In 2019, artificial intelligence was responsible for underwriting premiums worth an estimated $1.3 billion. By 2024, this figure is predicted to increase to over $20 billion.
Source: Juniper Research
Insurance buyers should also be mindful of the fact that the new policies being offered can differ from their current ones – due to changes in regulations or restructuring of plans – which could impact their coverages and reduce the amount of valid options available.
Furthermore, other challenges include difficulty in navigating through renewal forms and spreadsheets, inadequate claim settlements and even unpleasant customer service experiences.
Although these issues can torment insurance buyers every year, it is crucial to take proactive steps and stay as mindful as possible during the renewal process. The next tips will help you navigate the renewal season with mastery and get the best results for your company.
1. Start early
Renewing an insurance policy can be a daunting task for even the most experienced risk manager. Without adequate preparation, buyers often find themselves confronted with higher premiums and fewer coverage options.
Global commercial insurance pricing rose 6% in the third quarter of 2022, according to the Marsh Global Insurance Market Index.
To avoid surprises, it is of utmost importance to take all the necessary steps beforehand when preparing for renewal season in order to get the best coverage and value.
“Start preparing significantly in advance and talk to people early. What’s important is trying to maintain a consistent set of information that you’re updating constantly over the course of the year”, recommends Insurwave’s CEO, David Power.
With all the liaising and collating involved, the insurance renewal process can be lengthy, so the sooner you start, the better. At the beginning, it is important to establish a very clear end-goal and ensure that all departments involved know what that is and how they can help. By knowing these things, you can minimise the potential gaps in the data and clarify the insurers' needs. Additionally, starting early will give you time to analyse the data, uncover new opportunities, detect anomalies and anticipate potential insurance issues.
- Has your commercial line of business remained the same or changed?
- Do all assets properly account for a change if one has occurred?
- Is there any information the insurers will require?
By knowing these things, you can minimise the potential gaps in the data and clarify the insurers' needs. Additionally, starting early will give you time to analyse the data, uncover new opportunities, detect anomalies and anticipate potential insurance issues.
2. Set a clear strategy before engaging in renewal discussions
The concerns and needs of each organisation can be dramatically different. Work with your broker to create a plan based on your specific risk appetite, culture, and budgetary considerations. The main topics you should discuss are:
Primary objective. Some organisations may wish to reduce premium expenses even if it means retaining more risk. Others may want to secure a robust coverage even if it requires additional cost. And some may have specific and varying objectives by coverage type and/or asset.
Where specific priorities rank. In other words, what you must achieve versus what you would like to accomplish and where you can be flexible.
3. Turn the strategy into a plan
Unfortunately, many buyers don’t research what their policy covers before renewal – only to discover that they are underinsured or have overlapping coverages.
Here’s how you can avoid this, according to Tom Williams, Senior Product Manager at Insurwave: “Think about what sources you need to get data from to provide to the broker. Do you know which systems need to collect which data and who’s going to do it? It takes effort to collect data from multiple people and different systems.”
"Once you are done" Tom continues, "think about how you can make this process more repeatable or maintainable. Pulling data from different systems can be too time and effort consuming, so it makes sense to have a plan for how you can make this more repeatable, including processes and technology."
4. Set realistic expectations with key stakeholders
The negotiations involving renewals can be lengthy and more challenging for those directly involved in the insurance buying process. Despite some buyers’ perception that this flow is egregious, insurers tend to take this as an inherent part of the underwriting process.
In order to keep stakeholders informed of the status of their submissions and any concerns raised by insurers, such as price, buyers should stay in regular contact with their brokers throughout the process. Having a single source of data is critically important, as this helps all parties stay on the same page and have transparent asset, risk exposure, and premiums.
5. Optimise communication over your data collection
The insurance renewal process requires clear, transparent and constant directives at every stage. Especially at the questionnaire stage, where a significant amount of information is collected.
When gathering the disparate amount of data needed to go through this process, it is vital that you communicate what your goals are and what you need from the departments involved. In order to determine whether your communication is effective, you should ask yourself:
- Do all departments understand what is needed from them and when?
- Which departments will be affected if the renewal questionnaire is not completed on time, or correctly? Are they informed of these consequences?
- Are there any incentives for the departments with the bigger premiums? If not, would that help?
The clearer and more transparent your communications are, the easier the process will be for your colleagues and, therefore, the richer the collected data. Great data is the difference between a poor snapshot and a high-definition video.
6. Make sure your broker knows your requirements
This allows the broker to be better informed and use this knowledge to create or obtain the policies you need from insurance companies. Deep understanding of your business will empower your broker to better represent you in insurance markets. Here’s why.
“Make sure you work with your broker so that they have a really good deep understanding of what your business does. Once the brokers collect the right information, they’re going to present coverages and products that are really well aligned to your business,” says David Power.
“Work with your broker and insurer to examine what the insurers are presenting to you in terms of price coverage and deductible excesses. What will often happen, you might have a new entrant or new insurer coming in with a really competitive price. But when you look at what they’re actually providing cover for, it’s not actually that well aligned to what you need, or the excesses might be really inappropriate.”
The top tip is to really work with your broker to understand what products and coverage you’re being offered.
7. Review your coverage with your broker annually
Insurance companies are constantly coming up with new pricing models to increase profitability, so any previous assumptions about premium costs can no longer be relied upon during renewal.
“Work with your broker to make sure that the data that you’re providing is up to date, and accurate, because that data is going to be used as the basis for your insurance coverage, and you want it to be based on good accurate data, which needs to be complete and up to date” Tom recommends.
8. Shop around when your renewal date approaches
When it comes to our personal lives, to make sure we are getting the best price on our car insurance, it usually pays to shop around. Despite this common knowledge, many businesses simply renew their existing policies each year without taking the time to compare their coverage and premiums with other companies.
In short, when your renewal approaches, it is important to shop around in order to ensure you are paying fair prices for your coverage. Doing so could save you quite a lot of money.
Technology offers the helping hand during renewable season
In the past, a lot of manual processes were involved to review policies and renew coverages. But technology has revolutionised insurance renewals, making them easier and more efficient than ever.
Most of the renewal process can be automated with help from artificial intelligence (AI) and other technologies. There are tools able to analyse all policy and asset data and check for any changes in real-time, for example.
By leveraging such technology, companies can save time and money when navigating the hassle of the renewal season. Of course, in combination with sturdy security protocols these technological advances can ensure that customers’ data remains safe while having an easy time keeping up with their policy renewals.
There are a lot of factors to consider when renewing your business insurance, but adopting a digital insurance platform should help you get a smooth sailing across this renewal season.