Skip to Content
The content on this page has been translated automatically.  Go to the original page.
Building_LR_shutterstock_159623462.jpg

Some business risks are so large that one insurer cannot cover them alone. Think of fire and collapse risks in large construction projects, accidents during international transport or business liability risks. These risks can still be insured through the co-insurance market.

Sharing risks

On the co-insurancemarket, large risks are offered under the leadership of insurance brokers. Many policies are renewed or renewed on January 1 each year. In the run-up to that date, the renewal of policies, the market is busy. Demand from companies and supply from insurers are then brought together. And because the demand often concerns large business risks, multiple insurers can subscribe to a certain percentage of a risk. Is there any damage? In that case, the insurers involved will pay the compensation proportionately. In practice, one or two insurers are leading and the first point of contact for the broker and the client (the company).

Insurability of business risks 

If supply and demand on the co-insurance market are not in balance, sometimes shifts. For many years there was talk of a 'soft' market, in which Companies were able to negotiate favourable terms  and lower premiums at the expense of insurers' results. As a result, there was less attention for and investment in prevention. Since 2019, this picture has started to change and the market has deteriorated , causing insurers  to impose stricter conditions , demand  more or better preventive measures   or charge higher premiums . 

If companies do not agree with the offer of insurers, it becomesmore difficult to take out the insurance. Some risks and industries are more difficult to insure than others. This is referred to as the degree of insurability. Proproblems with insuring recycling companiesare an exampleof  this.  

Improve the prolongation process

The Dutch Association of Insurers, together with the trade association of independent financial advisers Adfiz and the Association of Dutch Insurance Exchanges (VNAB), has drawn up principles and accompanying guidelines for the 2021 renewal process. The principles and guidelines have also been coordinated with the board of the Association of Dutch Risk and Insurance Managers (NARIM).

Insurability

The VNAB guidelines have been drawn up to promote insurability and customer satisfaction in the business market. These explicitly do not focus on the content of agreements between market parties. With the guidelines, the three parties hope to jointly optimise and shape the process of prolongation in the business (co-insurance) market.

More time

By starting the renewal process in a timely manner, players in the co-insurance market will have more time to exchange information. In this way, they can arrive at a more adequate insurance solution and make better agreements about timely renewal or adjustment of the policies. More focus on the long(er) term relationship between the company (i.e. the customer) and the insurers is also needed to prevent excesses. This should ultimately lead to better insurability and customer satisfaction in the non-life insurance market.

Because not all problems can be solved immediately, the VNAB evaluated the effectiveness of the 2021 prolongation at the beginning of 2021. This has resulted in adjusted joint guidelines for the 2022 prolongation process.

Contract security

This is certainty for all parties in the chain (customer, broker and insurer) on a predetermined date. There is clarity about coverage, conditions and premium, which are laid down in the insurance contract. The evaluation of the 2021 prolongation has shown that market parties are not yet satisfied with the performance of the sector. This has led to the VNAB Contract Security programme, and thus to an improved work process throughout the chain. This multi-year program focuses on optimising the joint renewal process, stimulating insurability and increasing customer satisfaction. Good steps are being taken and tools are being developed for the members, such as: spreading peak load, structured termination, rejecting working methods and prolongation dashboard. The VNAB periodically reports on the progress of the programme.

Ensuring sustainable waste processing

The processing of waste runs through a long and complex chain, in which a lot can go wrong. Among other things, the increase in flammable materials, such as lithium-ion batteries in waste, causes more fires and greater damage. At the initiative of the Association, branches and companies in waste processing and recycling, insurance advisers and insurers discussed the (new) fire risks in this sector and their insurability at the beginning of 2023. Agreements have been made for follow-up processes.