Over the past decade, new technologies have brought with them a plethora of issues that have completely changed insurance. And, in 2019, insurance is set to change even more with policies being affected by the onslaught of big data, driverless cars, GDPR, and blockchain amongst many.
2018 was a strong year for insurers, owed mainly to sustained economic growth, higher investment income and rising interest rates. That said, 2019 might not be as plain-sailing. The potential for an economic slowdown and the uncertain future of tariffs and trade rules, post-Brexit, may cause insurers to be wary.
Previous property insurance trends
Following the catastrophes of 2017, all eyes fell on the property market for 2018 and what we saw was rising home insurance premiums. The average price of combined buildings and contents insurance is up in the last quarter and over the past year, a trend worth noting. Often, insurers will reserve their best prices for new customers, however, the Competition and Markets Authority has called for a reform in the property market insurance to prevent people from being exploited, so that’s one change we may see this year.
Additionally, it’s likely we’ll see premiums continue to rise, particularly if extreme weather continues. In the US, many insurers are refusing to provide cover to homeowners whose property is surrounded by forest, following the deadly Californian wildfires that caused some $9 billion worth of damage to insured properties.
Fellow insurance trends
Property insurance isn’t the only premium under close scrutiny in 2019, but public liability insurance has also been brought under close review. Following the drone chaos at Gatwick, the city of Coventry have banned the use of the technology. However, the ban can be lifted to allow professional and commercial organisations to use council land for flying drones under strict regulation, and with the appropriate public liability insurance. Public liability insurance will protect you if someone else’s property is damaged, however, it also protects your property.
2019 is likely to reveal that house prices across the UK are relatively flat and even the likes of London and the South East are flailing somewhat. Brexit is likely to be on the mind of many homeowners as we enter 2019 and things are likely to get worse before they get better, with the first quarter of the year set to be particularly tough. Prices are tipped to drop by up to 15%, with many buyers demanding this discount.
The insurance sector, and particularly the property insurance sector, is also set to be hit hard by Brexit, because of the uncertain future. Currently, insurers are issuing renewals that run beyond the 30th of March (the date set for Article 50 to sealed) as well as policies that may be expected to operate in the EU, or rather be with a European insurer-writing business in the UK.
It remains unclear though whether those covers will remain legitimate once Britain officially leaves the EU. Insurers must brace themselves for an influx of policy cancellations, and we may see a large epidemic of properties going un-insured.