The Business insurance market
. . . competing for your custom
There are lots of insurers out there competing for your custom. There are large insurance companies that most people have heard of. There are specialist insurers who are experts in particular types of insurance. And there are underwriters who do their business at Lloyd’s of London.
Then there are the insurance brokers or intermediaries who offer to find you the best deal from insurance companies and underwriters. They too are competing against one another for your custom.
All this means that the insurance market is complicated – but also highly competitive.
Cutting the cost of insurance
As insurers compete for business, they attempt to win more custom by cutting the premiums they charge – so the cost of insurance can reduce. Your renewal premium one year may be much less the following year.
Which sounds like very good news, except that at other times the reverse happens. Insurance companies realise they have reduced their premiums too far and have lost money as a result. Then they want to recoup their losses by charging you more.
So, whether prices are currently coming down or shooting back up, it pays to shop around and get the best deal that’s going.
Helping to protect your interests
You may have heard of the FSA (Financial Services Authority). They are an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000. They are financed by the financial services industry but their remit is to promote efficient, orderly and fair markets and to help retail consumers achieve a fair deal.
They do this by promoting:
- market confidence: maintaining confidence in the financial system;
- public awareness: promoting public understanding of the financial system;
- consumer protection: securing the appropriate degree of protection for consumers; and
- the reduction of financial crime: reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime.
When buying your insurance, you should ensure that the insurance company and/or insurance broker are authorised by the FSA. This will mean they are obliged to treat you fairly and act in your best interests.
To find out whether a company is authorised by the FSA, you can ask them or access their website by clicking here
Once you have established that your insurance company or broker is authorised by the FSA then you can expect them to provide you with key facts about the service they offer and the insurance product you are purchasing.
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