Supporting customers with navigating the rising cost of living
At Compass Networks, we work with a carefully chosen selection of insurer partners who share our goal to help grow, protect and support our members. Please find an article from insurer partner, PremFina below, highlighting the opportunities that can arise from the cost of living crisis.
Increases in the cost of living in the UK are set to put real pressure on both consumer and business spending power for at least the next twelve months. In turn, there will be inevitable knock-on effects for insurance brokers, as customers seek to cut costs by reducing coverage or shopping around in search of lower premiums.
With every challenge, however, comes opportunity. The brokers able to support customers with flexible, innovative solutions can not only protect their books in the short term but also gain longer-term advantages.
The big squeeze
First, it is important to understand the scale of the issue – and, for consumers and businesses alike, the numbers make for grim reading.
Research from global market research consultancy GfK found that consumer confidence in April fell to its second-lowest level for almost 50 years, only surpassed by July 2008 when we were in the grips of the global financial crisis. In that environment, it is no surprise to see consumer spending in decline – and expected to decline further throughout 2022.
The situation for commercial clients is no better. In fact, the cost of doing business has rocketed in recent months – with input price inflation now standing at a record 19%. Again, it is no surprise to see 47% of business leaders pointing to the cost of living as the biggest challenge they will face over the next six months – and 29% planning to change suppliers in search of lower costs.
The broker challenge: Cost pressures and under-insurance risk
For customers seeking to cut insurance costs, there will be a temptation to find lower premiums by cutting back on cover at a time when rising costs and supply chain disruption are already raising the spectre of widespread underinsurance – particularly in property markets.
Clearly, this could leave many exposed if the time comes to make a claim, but also leaves brokers battling to balance conflicting priorities – how to help customers manage costs without compromising on protection.
On the other hand, brokers able to offer flexible, innovative solutions, balancing price and protection, can find real and lasting competitive advantage.
Agile, flexible, innovative solutions
Clearly, one way to find that balance is by enabling customers to spread the cost of insurance. PremFina is helping brokers to do just that, with agile, flexible, innovative premium finance options. Paul Trail, Sales and Marketing Director, PremFina UK&I notes:
“There is no doubt that increases in the cost of living are driving real demand for premium finance options, but customers also expect more. They want flexibility, transparency and a great customer experience.
“We are revolutionising premium finance and bringing FinTech innovation to bear on everything from smart, data-driven pricing and a slick customer experience to real-time management information. For brokers, that’s all backed by flexible funding options designed to help maximise the commercial and business benefits gained from delivering for customers in these challenging times.”
To find out more, please contact ben.lemmon@premfina.com.