ClubCOLLECTIVE July 2022
Traditionally, the insurance market has been cyclical and we saw premiums rise and fall over a 7-10 year period. However, as a result of the ongoing catastrophes in the last five years (outlined in the table below), alongside low interest rates, high inflation, and supply chain issues the market has been faced with unprecedented times and the hardest insurance market there has ever been. Clubs are being faced with significant premium increases and reduction in cover by insurers in order for them to rectify historically unprofitable results. It is of our opinion that current premium rating is the new benchmark and insurance premiums are unlikely to fluctuate drastically in the near future but rather rise and fall by 5-10% around the 'new normal'.
In order to manage the increase in premiums and increase your businesses appeal to insurers it is important now more than ever to have a solid risk management plan in place and engage with your broker well before your policies are due. Some non-negotiables and key considerations for clubs in our opinion are outlined below:
- Asset valuations (your D&O policy does not cover you if you get this wrong). Covid has dramatically increased building costs.
- If you have asbestos then you must have an Asbestos Management Plan and Register. This is a legal requirement.
- Get chemical suppression systems in your kitchen cooking hoods (approx. $25k).
- Larger deductibles - show you are willing to take some risk yourself.
- Obtain Independent risk surveys & address the issues identified:
o Property
o Liability
In addition, it is important to be aware that clubs present a unique insurance risk that not all insurance brokers understand. We highly recommend dealing with brokers that have a great deal of experience in this market and the ability to negotiate with insurance companies through competitive advantage achieved through having larger portfolios of club business.
For the full article and more information regarding what you can expect from insurers and risk management strategies, click the link below.
https://www.warrensaunders.com.au/insurance-market-update-clubs/
Contact Information
Name: Kara McBride
Title: Marketing Co-ordinator
Phone: (02) 9587 3500
Email: karam@wsib.com.au
Website: www.warrensaunders.com.au
