Four Ways to Thrive in a Softening Commercial Insurance Market
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After years of hard market conditions, the UK commercial insurance market is now softening.
The latest Insurance Times Commercial Line Premium Index reported a 6.7% overall rate fall across commercial classes. To break this down a little further, combined liability and commercial combined products saw falls of between 4.6% and 5.2% year-on-year, whilst specialist and niche lines saw rates decrease by an average of 15.4%.
When markets soften competition intensifies. As a market commentator recently observed “lower premiums … more capacity … broader coverage” are hallmarks of a softening market.
In this environment, differentiation becomes critical to success. The winners are typically those that retain customers through exceptional service, maintain underwriting discipline and pricing even as margins compress, and importantly have the capability to unlock new growth opportunities.
Most importantly those that thrive embed technology that enables agility, insight, and connection. Here are four key ways insurance businesses - from brokers to underwriters, and networks - can navigate a softening market smarter, faster, and more intuitively:
Retention is the new growth in a soft market. Customer expectations do not fall alongside rates, in fact in a price-sensitive market consistency, trust and value-added service, rather than the lowest premium, is the surest way to drive differentiation and therefore growth.
A unified 360° client view with embedded intelligence can help insurance businesses surface critical insights such as renewal timings, coverage gaps and claims history. In turn this gives front-line teams new opportunities to engage proactively at every stage of the policy lifecycle and continuously address emerging needs, risks and opportunities. The result is increased loyalty, reduced churn, and more profitable renewals.
In soft markets there can often be real temptation to loosen underwriting and pricing standards in order to chase volume. But maintaining discipline is vital to maintaining profitable and sustainable business.
With the right tools and connected financial and company intelligence insurance businesses can achieve the portfolio-level visibility required to anticipate risks, spot accumulations, and see patterns of exposures. Layer over this streamlined, data-driven workflows and the ability to make rapid adjustments to pricing and appetite becomes easier, helping to retain discipline whilst maintaining margin and protecting the integrity of every book of business.
Technology and data analytics are essential to identify trends, improve risk assessment, optimise pricing and use insight to drive competitive proposition advantage in a sift market.
Harnessing data from multiple sources and applying the latest advances in artificial intelligence can help spot shifts in customer behaviour as well as emerging risks and market trends. This can help insurance businesses deepen relationships, reduce friction, launch new product offerings or refine existing ones, and spot gaps in the market or underserved customer segments. And most importantly do it all faster than the competition.
The market may be softening but growth is absolutely still possible.
With the right data and ability to streamline complex workflows insurance businesses can continue to target the right clients at the right time and jump on the best opportunities for growth. Improving the customer experience throughout every stage from acquisition and onboarding, to monitoring and retention, and offering value beyond price.
A softening market doesn’t have to mean less opportunity. Thriving just requires a shift in perspective – from chasing volume to excelling at service and value. Insurance businesses that invest in the right technology will win out.
nCino is helping drive a new era in insurance success even in soft market conditions. We’re dedicated to creating powerful solutions that help deliver exceptional service while achieving growth objectives. From underwriters seeking new ways to enhance risk decisioning to brokers and networks seeking organic growth, we’re committed to delivering the innovation that will transform how you operate.
PIB, Howden, Hedron, Aon and Aviva are amongst those already taking the lead. Book your free personalised demo to start thriving and not just surviving in this softening commercial insurance market.
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In September, the nCino UK Mortgage team ran a workshop with 40 delegates at the MoneyLive Building Societies event on the topic of digitising mortgage journeys and the solutions technology offers.
