Insurance Age Broker Survey: Commercial Property

Insurance Age Commercial Property Survey – Covéa pots the prize
Insurance Age’s Commercial Property Insurers’ Survey sees Covéa Insurance just pulling away from close rivals Zurich and Arch to clinch the gold award.

Covéa’s narrow lead was secured by an average score of 76.13%, only slightly ahead of Zurich with 75.00% and Arch Insurance, which scored 73.18% and the survey provides a number of key insights into the sector, including efficiency in providing quotes for new business, underwriting quality, cover, policy documentation and renewals.

Commercial property issues may well have been high on the list of brokers’ concerns. There will have been a significant impact resulting from the pandemic, as many offices, shops and industrial premises were left empty during lockdowns. This led to a change in risk profile and in addition, brokers may have found their clients were struggling to pay premiums or seeking less cover at lower rates.

Although office workers are now returning, this is far from universal, with many companies agreeing to a continuation of home working or opting for hybrid models. Some companies may seek to exit where leases permit or to sell premises and instead work remotely. Others could choose to take on buildings that are smaller and in lower cost areas. Further, many high streets are troubled, rents are going unpaid and plans include transforming retail space into residential.

These issues present short and long-term challenges and opportunities for insurers and they will be keenly aware that the sector remains in a state of flux. There will be major implications here too for brokers, but certainly as far as this survey was concerned, the most important factors, were the ability to reach underwriters and have their demands met.

The Gold Award
Covéa Insurance succeeded largely because of the consistency of brokers’ responses. It may not have been in the top slot across all the metrics,but achieving a relatively high score enabled the company to beat the opposition.

So, in terms of ‘Policy documentation – useability and clarity’, Covéa scored 81.94%, just narrowly ahead of Zurich’s score of 81.67%. Meanwhile, on ‘Quality of Underwriting, communication and access to decision-makers’, Covéa’s score was 76.47%, again, in touching distance of Zurich at 75%, while in this case, Arch Insurance trumps both with a score of 81.82%.

Looking at ‘New business – efficiency in providing quotes’, Covéa was again in second place, with a score of 73.61%, whereas the winner was Aviva, which gains fourth place in the survey, and scored top marks of 75.00%

Brokers have expressed their satisfaction with Covéa’s commercial property proposition, noting that pricing was often competitive, and as one commented: “There’s been excellent communication and rates, with easy to access underwriters with authority and flexibility.” Another described the company’s underwriters as being “accessible, quick and efficient” and that they were “easy to contact and quick to agree terms”.

The Silver Award
Zurich scored well throughout – for example, in the ‘Cover – scope and quality’ category, the insurer was pick of the bunch at 80.00%. It dropped off somewhat, though, within the ‘Renewals – efficiency and fairness’ category. Here, Zurich’s score was 66.67%, which can be contrasted to 72.22% for Covéa and 70.45% for Arch Insurance. It should be noted within this category, however, that all scores for insurers are comparatively lower – it appears that the hugely uncertain trading conditions and economic volatility has made the commercial property pricing proposition more uncertain. This could have led to higher renewal quotes at a time when insureds were least likely to find them affordable.

Overall, Zurich remains a dominant provider within the commercial property sector and brokers have backed it, making comments such as: “The insurer is easy to contact and agree terms,” and praising its broad risk appetite.

The Bronze Award
With 14 offices across the country, Arch Insurance has an emphasis on working closely with UK provincial brokers, and this included throughout the challenging conditions, and according to CEO, Steve Bashford: “We are open and honest with our brokers and that transparency is the backbone of all our relationships. I am proud of how Arch, and our broker partners, have stepped up to maintain service levels and support our customers throughout this difficult period.”

Notably, Arch scored highly in the ‘Quality of underwriting, communication and access to decision-makers’ category, achieving 81.82% - showing a considerable advantage over Covéa 76.47% and Zurich’s 75.00%.

Brokers praised Arch for its “approach to pricing and risk appetite” and “it’s endorsements are good” – which suggests the insurer was willing to work on a more bespoke basis with its brokers in adapting cover as required.

As the UK economy starts to gear up, commercial property may well present insurers with growth prospects, providing they can look at different types of solutions – post pandemic, there will be changes within the sector and that means being prepared to innovate. This could mean a less restrictive planning process, more building on brownfield sites, expansion in ‘greener’ commercial development and a switch from retail to residential. The gains will be there for responsive insurers if they are in tune with the demands of their brokers. The gauntlet is down, so who will be gaining the honours in 2022?