British Furniture Manufacturers

Helping BFM members navigate their business insurance programme

22 March 2022

Helping BFM members navigate their business insurance programme

PremierlinePremierline Business Insurance Brokers - Prior to the COVID-19 pandemic, a number of factors were already impacting the insurance market, resulting in insurance companies taking a much tougher approach to underwriting. Add to those factors the ongoing issues surrounding the COVID-19 pandemic and the insurance market is now facing the toughest set of conditions for 20 years. After two decades of supply outstripping demand, there is now a severe shortage of insurance capacity in a number of sectors and, in a nutshell, this is the hardest insurance market in a generation.

Briefly, the main influencing factors are as follows:-

  • Pan-European legislation (“Solvency II”) has taken much of the spare capital out of the marketplace causing a number of insurers to leave the market whilst others have significantly reduced their capacity. Solvency II has also created a significant barrier to entry meaning that lost capacity in most cases is not being replaced.
  • A negative Ogden table which means insurers are having to pay out far more on larger personal injury claims.
  • Property rates in the UK were far too low and Insurers need to apply increases just to balance the books. In addition, the storms of the last two years have cost the insurance industry in excess of £500m.
  • Climate change is causing insurers to struggle with correctly predicting floods, and they need to build up a pot of money to take care of the next set of bad floods which will inevitably be on their way.
  • It is estimated that the combination of insurance claims and investment losses due to COVID-19 will cost the worldwide industry in excess of £200 billion, making it the most expensive insurance event ever.
  • Reinsurance rates are rising significantly, and capacity will reduce – Reinsurance is a key component of an insurers pricing model and rates have risen significantly. Insurers have no option other than to reflect these increases in their rates.
  • Interest rates are at an all-time low – when interest rates are high, insurers can get away with a certain amount of underwriting losses as their investment income will bail them out. As the current interest rates are the lowest in the Bank of England’s near 300-year history, insurers have to write for profit and put up rates.

What does this mean for you in ‘real terms’?

Premiums have increased and insurer’s underwriting capacity and appetite for risk has reduced, which means that where historically, you may have been able to place your Commercial Combined policy with a single insurer, you now having to spread the risk (also known as ‘scheduling’) with a number of insurers, which adds a new layer of complexity to your arrangements.

Fortunately, through membership with the BFM, you now have access to an Insurance Broker with proven experience in arranging complex insurance cover for some of the largest and most respected furniture manufacturers in the UK.

Premierline Business Insurance Brokers is working in partnership with the BFM to help you, our members.

Here’s what Andy Kennaugh, MD of Alstons Upholstery said about his renewal with Premierline: "Premierline were very professional and offered a great service whilst sourcing our annual insurance”

With its unique understanding of the insurance required in your sector, Premierline can guide you through the complexities of spreading your risk whilst working with you to build a flexible insurance package individually tailored to your specific requirements. For more information or help with your insurance programme, please call Duncan on 07980 951043 or email

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