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DWF 3Sixty Blog

11 Insurance Hacks to Reduce Your Premiums

Posted by Tristan L Dorman on May 13, 2016 12:03:46 PM

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Public Sector organisations are always looking for ways to reduce overall costs. A sizable portion their annual budget is related to insurance cover 

Coupled with the fact that we are currently facing a ‘hard’ insurance market, the need for insurance teams to work smartly is more important than ever.

We initially published this post back in November, outlining 6 insurance hacks. This went down really well with lots of positive feedback. We've updated this post with some great suggestions we recieved. Continue reading to find out '11 Insurance Hacks to Reduce Your Insurance Premiums':

1. Self-insuring

We all know that claims history plays a major role in the calculation of your insurance premiums. The equation is simple: More claims, higher premiums. Less claims, lower premiums.

It’s also worth noting that an organisation with many smaller claims are considered a greater risk than one with a single large claim.

The more risk an organisation covers themselves, the less danger to the insurer that they will have to pay out on claims. Therefore, the lower your premiums. 

Having a large excess on your insurance cover is becoming increasingly popular in the Public Sector. The reduction in your premiums can more than off-set the cost of the smaller claims that you will be paying for yourself.

Some councils even self-insure 100% of their risk, managing all claims in house. This can represent huge savings, even when factoring in the cost of additional staff and a claims management system. 

If you'd like to find out more about Self-Insurance, we've written a post called 'Self-Insurance: Should you take the leap?'

 

2. Haggling

In a Which? study conducted in 2015, 78% of respondents successfully haggled with their insurers. Many people believe that negotiating price can only be done for retail customers but this is not the case.

If you want to successfully haggle down the cost of your insurance, it’s important to get the ball rolling early.

We recommend assembling your renewal bid 90 days before renewal. Review your policy history and send your bid documentation to at least three insurers.

The quotes you receive can then be used to negotiate prices

 

3. Don't be over insured

If you know exactly what your risk profile looks like, you can ensure than you are not over-insured. In order to evaluate your risk, you need to review all claims (successful and unsuccessful). It is also useful to gain information for claim types and any near misses.

Doing so that enables you to see what your average annual claims (your risk) looks like. This information can be used as evidence and shows insurers that you are aware of all risk to be accounted for when calculating premiums.

It’s almost impossible to claim that your premiums have been set too high if you don’t have factual evidence to back it up.

 

4. Change your payment method

If your budget permits, you can make significant savings by paying the full premium upfront.

The amount you can save may vary by provider and the value of the insurance, but it is possible to save around 15% on your premiums. Your best bet is to shop around to find the biggest discount.

 

5. Trend analysis & Reporting

Reviewing your claims on a regular basis can help you spot an emerging issue early on.

For example, there may be a loose paving slab in an area that’s resulting in a number of personal injury claims. This may not be flagged up, especially if you have a number of claims handlers in your team.

If you identify the problem area early on (and fix it!), you can eliminate a fair number of future claims. This results in a lower overall risk profile and ultimately lower premiums.

 

6. Use insured subcontractors

Insurance companies don’t like surprises. In fact, many require proof that your organisation only uses subcontractors that are covered by their own insurance.

If this is not the case, there could be additional claims made through your organisation from these third parties.

Insurance companies therefore get an unpleasant surprise when faced with a claim that they are not collecting a premium on.

 

7. Avoid the price comparison sites

While ‘aggregator’, sites as they are known, represent an easy way to get a number of quotes, often insurers strip out key elements of cover to keep the premium at bargain prices.

The best approach is to shop around and read the small print to make sure that you are definitely covered for the risks you carry. This does require more work, but it’s worth the graft for the savings you can make.

 

8. No claims discount

Just like with your car insurance, some insurers offer a no claims discount on commercial cover. If your organisation has been claims free for a number of years, it might be worth contacting your insurer to see if you are eligible for a discount.

 

9. Reduce the risk of your organisation

One easy way to reduce the cost of you insurance premiums is to reduce inherent risk in your organisation.

Speak to your insurer and see if there they have any recommendations around how to reduce your risk (e.g. improving the security or safety of your organisation).

Often these recommendations are fairly straightforward and not particularly difficult to implement. The resulting reduction in your risk, usually results in reductions in your premium.

 

10. Group Rates

Group purchasing is a hot topic in the public sector at the moment, and will only get more important as budgets constrict yet further.

Speak to your colleagues in other councils who carry a similar risk to see if they are interested in clubbing together. As a collective you can negotiate a better rate with the insurer.

Not all insurers will be happy with covering a more complex risk as it is more difficult to calculate. However, finding and insurer who will do this may represent a significant saving all round.

 

11. Utilise technology

It’s true that the Public Sector are some way behind when it comes to digitally transforming their processes. We even wrote an entire post on the issue.

When talking to our customers, resource is regularly cited as a problem. Although the points mentioned in this post are great ways to lower your insurance premiums, they can be rather resource intensive. Fortunately, there is now software available that can do many of these things for you.

Claims management software, can improve your processes in numerous ways. It can reduce settlements, process FOI’s in just a few clicks, as well as improve customer service.

Employing this technology also demonstrates that you are committed to taking claims management seriously. This gives the insurer comfort that claims will be managed properly and, in turn your risk exposure goes down.

Want to find out how our claims management system, EvoClaim, could help you? Click below to book a demo:

 

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Blog: Best Claims Resources to Stay on Top of the Game 

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