Prestige Underwriting’s latest Non-Standard Survey indicates growing concerns among UK brokers over the risk of underinsurance in the non-standard market.
The survey, which collected responses from brokers across the country, found that 84% believe current premium levels are affecting clients’ ability to maintain adequate cover. A further 92% said more non-standard customers may be underinsured as they reduce costs.
This marks an increase from the 89% recorded in the company’s summer 2024 survey, signalling a continuation of the underinsurance trend.
Tim Baxter (pictured above), business development and relationship director at Prestige Underwriting, said the findings highlight the need for greater innovation and flexibility in non-standard insurance products.
“With economic pressures continuing to squeeze both brokers and their clients, it is imperative that we, as an industry, rise to the challenge of providing tailored solutions that address these unique circumstances,” Baxter said.
Other market research supports the survey’s findings, with Aviva’s Broker Barometer revealing continued broker concern over asset valuation mismatches, a key driver of underinsurance across both standard and non-standard risks.
Pen Underwriting has estimated that around 76% of UK properties may be underinsured, while a separate Charterfields study found over 40% of commercial properties are affected.
That report indicated 88% of surveyed commercial sites were underinsured on building values and 77% on plant and equipment, illustrating the scale of the protection gap.
Meanwhile, Prestige’s earlier research into non-standard lines has recorded rising broker-reported demand in categories such as unoccupied homes, flood-prone properties and thatched properties, suggesting the segment’s growth is occurring alongside deepening underinsurance issues.
Prestige Underwriting’s report also showed that 34% of brokers see the non-standard segment softening at pace, creating a gap between premium levels and the budgets of policyholders. Respondents pointed to customers reducing cover or accepting higher excesses to manage costs, which is contributing to the rise in underinsurance.
Structural challenges within the non-standard sector were also highlighted, particularly in markets such as flood-prone properties and thatched homes. These risks often depend on outdated rebuild valuations. Rising material and labour costs, combined with a shortage of specialist contractors, are leaving sums insured below actual reinstatement values.
The survey also identified a perceived shortfall in product customisation, with only 47% of brokers agreeing that existing insurer offerings meet the needs of their clients. Baxter said the results show that uniform products are no longer sufficient, adding that brokers want partners willing to adapt to evolving customer requirements.
“Brokers are seeking partners who are willing to listen and adapt to the evolving needs of their clients. Prestige Underwriting remains committed to working closely with brokers to develop products and services that bridge this gap,” he said.
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