A society without it equals chaos, and the cost of everything would increase exponentially. Insurance saves you from financial ruin.
Imagine how stressful driving would become or the worry of something happening to your home, business, or health without it. As consumers, we take it for granted that we can have the greatest level of coverage and pay the cheapest premium with as much convenience as possible. Delivering all of this with spiralling costs, world events, and the breathtaking pace of new technology is a real challenge for insurance companies.
Insurance companies have more competitors today than in the past, and this helps drive down the cost of your premium to affordable levels. If a handful of large companies dominated the market, then things would be very different. New entrants to the market compete on every level, from better customer service, increasing product choice, and every other aspect of the insurance business.
Insurance companies are not immune to inflation. It’s in the best interests of insurance companies to provide you with the best level of coverage without paying too much for your premium. With the spiralling costs of materials, manufacturing, and transportation, insurance companies are forced to pass on these costs to the consumer. It’s no secret that car insurance premiums have increased. It may feel unfair, but the reality is that the cost of repairing or replacing your car has shot up drastically. Add these rising labour and energy costs to the insurance company’s operating costs, combined with the same increase in these costs for your vehicle manufacturer, and it’s easy to see how prices have risen.
With rising sea levels and the increased frequency of bad weather, insurance companies have been hit with a larger number of claims. Climate change makes the weather less predictable, and more claims can lead to higher premiums. Calculating risk, an already complex process, becomes even more so. The agricultural sector has also suffered, as have transport companies. Wildfires are also becoming more frequent, causing damage running into millions of pounds.
Rising customer expectations
As a consumer, you want to get the right level of coverage. You want a policy that’s tailored to your individual requirements. You expect the best regardless of what you are insuring—your car, business, home, or livelihood. From quick claim resolution to knowledgeable and friendly customer service, you want it all. And why not? Insurance companies are making this possible by implementing new technology.
The insurance industry is going through a digital transformation. To remain competitive, insurance companies must continue to invest in AI, from chatbots to data analytics to calculate risk assessment, fraud detection, and customer insights. All of this is done to process your claim quickly. It also makes your interaction seamless and constantly available while creating the best possible insurance policy for you.
The FCA regularly enforces new rules for insurance companies to follow. The FCA, which aims to establish higher, more precise standards of consumer protection, began enforcing consumer duty in 2023. New legislation drives insurance companies in the right direction, so you can get a better policy at a better premium for all your insurance needs.
Contact us today so we can tailor your insurance policy