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Blog: The hardening high risk liability market and how brokers can help


Matt Pini, of Direct Insurance London Market considers how brokers can respond to changing conditions.

Most of today’s insurance professionals will not have traded in a hard market. We’ve not seen a true hard market since the 1980s and to some degree the early 00s. Whilst we are not currently operating in a truly hard market, there are signs of a shift in this direction. Rates for high risk liability lines have already hardened.  We’re not expecting to see the 20%+ rates for demolition contractors that we saw in the early 2000’s, but it wouldn’t be surprising if rates moved nearer 10-12%. Brokers across the market, particularly dealing with high risk liability, are increasingly having to face difficult conversations with their clients on premium levels. 

All areas of the High Risk market will be affected by the conditions with possibly the only exception being niche in-house schemes for specific trades or industries, where the broker has highly specialised knowledge of the market and insurer relationships, for example our own Asbestos Removers facility.

As brokers we will all need to be more proactive through a hard market. How you plan your strategy and manage your client relationships now will have a huge bearing on how your business fares.  Make sure you are prepared and more than ever maximise the relationship you have with your wholesale broker. Wholesalers will have a team of executives on hand to guide and assist the broker through tough renewal negotiations and this support will be vital as even the most straight forward renewals can be a difficult process. 

Firstly, know your market. Spend time with your client to really get to know their business. Developing a deeper relationship with professional and effective communication will help to soften the blow of increases in premium and potentially more onerous policy conditions.

Work efficiently. Changes in insurer appetite could increase the need for you to market renewals. Understand which markets to approach, not wasting time marketing to insurers who have no interest in helping you. Partnering with a wholesale broker with expertise in your client’s niche and the ability to market on your behalf is critical.

Begin the renewal process early. We’ve all heard the phrase ‘fail to prepare, prepare to fail’; this is never so true as in a hard market. With insurers reducing exposure, you may need the support of multiple capacity partners to fulfil the needs of your client. Running around the market on the day of renewal, trying to layer a risk to 100% will not only increase your stress levels but will mean the client is unable to make an informed decision on the suitability of the cover sourced and leave a lasting impression of lack of control on your client.

With harsher market conditions comes opportunity. Where competing brokers are not providing education and support to their clients, you have the chance to position yourself as a credible alternative. Tenacity will see those willing to fight hard for client needs, succeed where others fail.

Matt Pini is head of UK wholesale at Direct Insurance London Market

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