Insurance costs rise and fall in cycles

I read your Infozone article on insurance with interest (Caterer, 26 January, page 64) and feel more qualified than most to comment on this topic.

What all of your commentators miss is that it isn't just about the price today. Insurance premiums rise and fall in cycles.

We are experiencing a soft cycle at the moment and premiums are low. But they will rise, as they did post-9/11.

Some insurers will keep these increases to an absolute minimum. Others will decide that they have filled their boots and either increase their premiums dramatically or withdraw from the sector altogether.

After 9/11 many high-profile leisure companies were faced with severe rate increases, and some even came close to not finding insurance coverage at all. Those who remained with the specialists did not suffer as badly as those who were forced into the open market.

Stability is the key here. Surely it is better to pay a fairly consistent premium year to year, which will, of course, respond to the cycles in the insurance market but will not punish consumers so harshly when the market is hard.

David Noble
Director, Gauntlet Insurance

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