20 September 2021

The Hard Market: Why now is the time to use a broker for your home insurance


The insurance market, specifically the UK Home Insurance market is changing. The market, which for many years has been a “soft”, buyers’ market and has shifted to what is known as a “hard market”.

A hard market is bought about by a reduction in insurers’ capacity and their appetite to write insurance. This reduces competition and can lead to restricted cover, higher premiums and more restrictive terms.

Now, more than ever, you need a trusted adviser to help you get the best home insurance cover at the best price.

More of this…

  • Premium increases
  • Restrictive Terms

…and less of this

  • Appetite for new business
  • Flexibility – take it or leave it
  • New insurers coming into the market
  • Insurers competing for new clients
A Bit of Background

It’s not all due to Covid-19. But it hasn’t helped. To summarise:

  • Insurer solvency rules mean that insurers now need to hold more spare capital. This is good because it reduces the chance of bankruptcy, but it also reduces insurers capacity to write business and has acted as a barrier for entry for new insurers to come into the market
  • The cost of casualty insurance has risen beyond that which insurers were expecting. Casualty insurers were hoping that their Property Insurance divisions profit would help offset this and that 2020 would be a good year with no big claim incidents.
  • But then storms Ciara and Dennis happened early in 2020. These were both 1 in 100 year events. Property rates were already too low to cover the cost of claims which are expected to be circa £425 million[1].
  • Interest rates are low, so insurers’ investments can’t be relied upon to shore up the property and casualty underwriting losses.
  • So, things were looking poor already. Then Covid-19 Struck. Early estimates put the costs to UK insurers at £1.2bn[2], including business interruption claims, travel insurance claims, and wedding insurance and other event insurance claims.
  • Current estimates of the cost of COVID to UK insurers are as follows[3]:
    • £2 billion for business interruption claims.
    • £204 million paid from protection life and illness insurance claims.
    • £152 million expected to be paid on travel insurance claims.
    • £121 million expected to be paid across other general insurance products, including events, weddings, and liability insurance.
What does this mean for You?

Premiums are rising and underwriters are likely to be quite strict in their renewal terms or acceptance of a policy in the first place. Already, we have seen some insurers increasing their minimum premium and requiring risk improvements. Others are imposing rate increases with a “take it or leave it” attitude.

How Aston Lark Can Help

More than ever you need an effective broker to fight your corner and to negotiate with underwriters. You need a broker with buying power and the experience and knowledge to argue your case and to get quotes from trusted alternative insurers.

Now is the time to ask a broker to help with your home insurance

There are:

  • still deals to be had
  • discounts to be found and
  • clever ways of reducing your premium

If you’re not sure if you’re on the best policy for you, then call Aston Lark on 020 8256 4901 and we can review your current cover.


[1] https://www.cityam.com/storm-dennis-and-storm-ciara-could-cost-insurance-industry-425m/

[2] https://www.abi.org.uk/news/news-articles/2020/04/covid-19–payouts-of-over-1.2-billion-likely-to-be-made-to-customers-according-to-latest-estimate-from-the-abi/

[3] COVID-19: Insurers expect to pay up to £2.5 billion for UK insurance claims ABI

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