26th November 2019

Case Study: Reassessing the sums insured for a secondary school in London, saved them £18,000

By Nigel Bond
Associate Director
Secondary school children walking in corridor

Using an insurance broker rather than the local authority reduced the premium of a secondary school in London by £18,000.

 

The challenge

Aston Lark was asked to offer advice and premium terms to a secondary school with 1,100 pupils.

Historically insured through the local authority, the school usually received their premium notice in the autumn, several months after the cover commenced in April.

Following a revaluation of assets, schools in the area were notified their sums insured could potentially double, with resultant premiums increasing considerably.

This particular school was notified of a 177% increase to their buildings sum insured (from £19m to £53m)

Based on this revision by the local authority, Aston Lark estimated a potential premium increase of over £16,000 per year. This would have had a profound impact on cash flow and budgets.

Annual premium increases of between 9% and 12% had already been applied in previous years, despite only one small claim having been made in that time. Further increases would have meant the school’s insurance costs were becoming unmanageable.

Aston Lark’s Solution

Having received several enquiries from schools in the area, Aston Lark wanted to confirm that the substantial sums insured proposed by the local authority were accurate.

While Aston Lark’s specialist school insurance products provided a final insurance solution, the sum insured increases were so dramatic that further analysis was warranted in order to reduce the premium.

Commissioning a fee-based professional valuation service via Aston Lark, the valuation report revealed a true rebuilding cost of just £31m, some £22m below the figure the local authority had proposed.

Service Level Agreements (SLAs) require schools to insure for full reinstatement costs, so this objective had been met, but at considerably lower cost.

Aston Lark’s initial quotation produced an estimated saving of £9,000 against their current policy, and over £18,000 after the sum insured increase was applied.

The real benefit was securing correct levels of cover and potential savings of tens of thousands of pounds over a three-year cycle.


Get in touch with Nigel Bond today on 01420 82501 or by email, nigel.bond@astonlark.com, to discuss your insurance requirements. Or click here if you'd like to find out more.