In this latest report we explore a fundamental but little understood change in industry practice: the increasing use of standardised off-the-shelf policies. Using extensive proprietary research based on current and recent policies, Mactavish explains how the one-size-fits-all approach has reduced the reliability of commercial insurance and, in some cases, rendered it useless. The recent FCA test case has thrown this issue into sharp relief, demonstrating on a massive scale the barriers policyholders often face when making claims against opaque policies that haven’t been adjusted for their particular needs.
- The dispute between clients and insurers over Covid-19 claims highlights how the industry is failing business
- Insurers refusal to cover Covid-19 impacts – against the context of ambiguously-worded business interruption policies – echoes wider client experience across all complex insurance classes, notably cyber
- Clients without a legal or technical background now often have no chance of deciphering their own policies. This abuse of trust is a legal disgrace
- Brokers and insurers are increasingly offering inadequate one-size-fits-all policies, rather than bespoke wordings that meet clients’ specific needs
- The side-lining of the technical skills base of both broking and underwriting means few in the industry now have the capability to understand over-complex policies or to adapt them to meet client needs
- When policyholders, brokers or underwriters do want to amend wording it is often impossible
- Covid-19, tighter governance and increasing business complexity are increasing the need for bespoke cover – just as standardisation is becoming the industry standard
- Buyers must lead the demand for change – the industry will not reform itself
Download the report to explore the findings in more detail and to understand what to look for in your insurance programme.