Insure TV Masterclass: Tackling Underinsurance

Mark C: Hello and welcome to this Insure TV masterclass on underinsurance. It's a huge topic for the industry but what can brokers do to protect their clients and make sure they get the best advice possible? Well to discuss that I'm joined here in the studio by a quartet of experts. Let's meet them, they are from Aviva, we have Jason Chambers, who's Director of Innovation. We're also joined by Nina Gill, Corporate Client Advisor from Macbeth Insurance Brokers. Next to her is Gus Teruel. He's Claims Specialist at Aviva. And finally, we have Mark Briggs, Managing Director of BCH. Jason, let's begin with you. Can you put some numbers around how big an issue this is? What sort of stats are you seeing at Aviva?

Jason: We're still seeing 60 to 70% of our customers underinsured. So it's still a significant problem. We've marginally seen that reduce probably over the last 12, 18 months. I think we are starting to get a message across to a number of brokers and customers that have started to make some significant changes. But it's still a significant problem. I believe at the moment, the latest stat from the loss adjusters is around about 40% of all claims are adjusted through one form or another, property claims that is through underinsured. So it's a material problem. We equally know a number of our customers are frustrated around some of the challenge it is to obtain adequate and up-to- date information, which together with our brokers and our partners, we're actively trying to support. But it's a material problem for sure.

Mark C: When you said 60 to 70%, how do you measure that? Is it out at the stage of when business comes through, you think? Okay. But that looks like it could be a little bit on the low side. If something goes wrong, or is it at the point that there's a claim?

Jason: So we're able to do that in advance. Either at new business or at renewal or at mid-term, we've got the ability to understand a customer's outline of their building. It's a common capability. From that, we're able to define square feet and square meters to obtain evaluation. And the operational effectiveness of that means that where we see a divergence greater than 20%, because there will always be some vagaries, we're able to with high levels of confidence identify underinsurance. It's certainly not uncommon for that to run into the millions where we identify customers that are insured to say one, two million who actually should be insuring for five and six. So we are not talking about smaller amounts for sure.

Mark C: Nina, let's bring you in. Tell us a little bit about your role at Macbeths. And when you look at this as an issue, how much of extra work does it create for brokers and clients when things do go wrong around under insurance?

Nina: So I look after the day -to-day general running of clients insurance programs, and particularly looking after their renewals. Quite often, we will look at sums insured when it comes up to a renewal starts often where we'll have those kind of discussions. If the figures aren't right, often it will come out when there was a claim. We end up having drawn out longer conversations, negotiations with the claims handlers. It becomes a much more complicated process to get a client's claim paid. And ultimately, they won't get 100% of their claim paid if they're underinsured. So it's really important to get that right in the first place and not have to deal with consequences when there is a claim.

Mark C: Thank you. And Gus, can you give us your perspective on this as an issue from claims.

Gus: In simplest terms, insurance is a risk transfer mechanism. So it's there to help customers who are running businesses alleviate some of the problems they may have and help them secure the business. So if the sums insured aren't right, then they're not transferring the risks that they want to transfer and there's going to be a shortfall. So I think if they choose to accept certain risks or they don't choose to transfer them, that's fine. As long as they do so knowingly, and they don't inadvertently be underinsured because then it comes to the claim stage where I will step in, then invariably there's a problem and as Nina was saying that's when they don't get perhaps what they need to keep the business afloat or to keep trading and the circumstances and the results that can be disastrous.

Mark C: Mark, tell us a little bit about BCH and where you get involved in this discussion around under insurance and value agents.

Mark B: Yeah, so BCH are a specialist reinstatement cost assessment provider. Hopefully for us, we get involved before the moment of the claim. So our role is to conduct an RCA or reinstatement cost assessment with the support of the brokers or the insurers to get that declared value that some insured right in first place. And hopefully avoid the problem of underinsurance for the customer.

Mark C: So when you look at your business, how much of it is done as you say, ideally, before there's an issue and how much of it is done?

Mark B: The majority of it. Yeah, in fact, we very rarely get asked to look at something in a kind of post-loss or a claims environment. Really, we should be being engaged prior to any of that potential circumstance. So for us, it's typically around renewal, perhaps at new business stage or as Jason said in mid-term as well. But it's important that we're at pre-the event of a loss to get that some insured right.

Mark C: And what are the implications for brokers when there is a claim? I mean, in the great smooth things needed, is it the broker that gets blamed by everybody else? Is it the insurer? Is it people such as Mark? Could you give us a sense of where liabilities lies and where it's perceived to lie?

Nina: Well, obviously, it can vary. But I think quite often, where the broker is sat in the middle, we end up being the ones that kind of get the first sort of pair of eyes on us to look at whether we've given the right advice to the client and whether we've had those conversations and sort of delved into their business and understanding what their needs are and had those conversations with them to make sure they understand that they need to have the right sums insured or are aware that if they don't want the consequences of that is.

Mark C: But, Gus, I mean, is there anything you see in terms of, say, going through the courts? If it all goes horribly wrong, it ends up in legal action. What’s the view?

Gus: I think certainly the courts seem to put more and more emphasis on brokers and their duty to help customers set the right sums insured. There's been some big legal cases and one particular last year, the Infinity Reliance Matter, where that the brokers were held to be culpable and significantly so, because they didn't help the customer in determining the sums insured. The judge was also quite scathing of the finance director of the insured, but it fell to the broker. So I think when you're looking at business interruption covers, then certainly there's three big cases that cover the different aspects . So you've got the Infinity Reliance Eurotech and then the Catholic delec and those ones cover length indemnity period, what you have as deductibles, if you're going to take those out, the sums insured and then whether it's a sum insured basis or a declaration linked basis. But I think in terms of the market, there is a particularly large loss assessor who will tell you that they are regulated by the FCA. They will say they have a duty if sums insured aren't right, that they look to hold comparable to the person that was giving the advice and invariably, unfortunately, that's the broker.

Mark C: Nina, what does a broker's professional indemnity cover, if there's quite a lot of issues around claims and under insurance? I mean, presumably that can't help your own insurance.

Nina: No, it's going to make it a lot more expensive. So it's important from that perspective and just more generally that we're doing the right thing by our clients and having the right conversations with them because that's our reputation at risk as well. It's not just our insurance is going to be more expensive. That's our reputation. You wouldn't go to an accountant and expect them to not advise you on one of the areas of accountancy that you're asking them to help. It's the same with insurance. We're the brokers. We're the experts in insurance. Our clients don't know everything about insurance. So we're there to support them and explain these things to them.

Mark C: Thank you. Well, let's take a step back. I suppose right at the heart of it, if we think of it, let's look at a property. Who decides how much it should be valued for in the first place? Jason, can I bring you in there? Because you said, I think, 60, 70% under insurance. So you're obviously seeing things on the data company.

Jason: Depending on the size of customer.

Mark C: Exactly. So I mean, what's your take on that ?

Jason: So look, we use data and technology for our underwriters working with brokers to ultimately give the customer the ability to make an informed decision. Ultimately, it is down to them to arrive at that sum insured. But as I said, it's increasingly very difficult, which is why we provide our own capability to work through what is an accurate and adequate sum insured. And invariably, where that's taken up, we remove average. We also provide access to trusted third parties, such as BCH, that enable that to have a very easy access , very quick access to a desktop survey, usually up to seven and a half million for a pretty small sum in the context of the potential loss. But the challenge we equally have is that we do find, and some brokers are certainly better than others on this, that 45% of our customers have an updated desk sum insured in three years or more. And I think we'd all agree that one of the fundamentals that is absolutely critical with ensuring you're on the right basis, particularly with what we've seen in inflation indexation, is reviewing your sums insured regularly. And we actively work with a number of brokers, as many as we can, on highlighting where there is a desperate need to review those sums insured, as I said, particularly where they've not been reviewed, and only where the sum insured essentially is moved on the basis of indexation. So those are the areas focusing on the customers that are the most vulnerable.

Mark C: Mark, how much of this analysis can be done online? There's enough data out there, and you can have a very good idea of what a building should be worth, really by going through existing data points. And how much do you actually have to get out there and kick the tyres, so to speak?

Mark B: Well, there's plenty of information available online about properties, in particular, in relation to market valuations. But we've got to remember that market valuation is not linked to the reinstatement costs. They're very, very different things. In terms of what can be done from a desk or even digitally using the Aviva kit tool, as I say, there is a lot of information there. We still have surveyors involved in even our desktop assessments, so they're going to be looking at the information online, their understanding of similar properties and that building. But equally, the gold standard for a survey is to go out and physically measure the building yourself, categorize and take the specification , the construction details. And that's really the best way of assessing the rein statement cost. Any one building, they can look almost identical and be in a very slightly different location, and it can quite significantly change the reinstatement cost. So you have to really look at building on its own merits, rather than assuming that they're all the same.

Mark C: We mentioned inflation a couple of times, but obviously everyone has their own rate of inflation, your own life, prices move around. So we're all used to seeing things like RPI or particularly CPI in the news. But in terms of rebuild costs, you give some idea of how the inflation rebuild costs might have very different numbers from what you expect when you sit down and watch the news at 10 o'clock in the evening.

Mark B: Well, a great example that we've seen over the last few years, of course, was material cost inflation. So we're all no strangers to the fact that for a period of time you couldn't get timber or plaster material, cementitious materials. That was very well publicised over the last four years. But that moves significantly more during that time for period than, say, general inflation. That may not be the case now. Perhaps more of the focus over the coming years is likely to be labour cost inflation with the pressures of potentially building and many millions of homes. So it does change in a very, very different way to just general consumer inflation.

Mark C: Nina can I get your thoughts around this. I mean, when you're talking with clients, they say, we think this property is worth this much, or this is how much we want to ensure it for. Do you take them on trust? I mean, how much probing do you have to do to sort of make sure that they've come to roughly speaking the right figure?

Nina: Yeah, it can be quite difficult because obviously, you don't want to turn around somebody and say, no, that's not the right number . We're not the experts either. We refer to the guys that do the evaluations to give us the right numbers. So we always recommend that they go and have evaluation every three to five years. We can point them in the right direction of who's best place to do that. When we go and visit clients to talk to them about renewal or for surveys, we can see if they've had extensions. We can see recently, I went to a client who had a new roof, but they hadn't changed their sum and showed, but the new roof was a better specification than the old one. So if they lost their building, it would be more money to replace the roof for a like, for like, based on the new roof. So there's lots of conversations we had around sort of specifics for their businesses, rather than just thinking, well, they've had that number for X amount of years and they've added on a couple of percent every year. That's just not going to cut it. It's not going to be right anymore.

Mark C: So you'd always recommend client every three to five years, use the service of a third party, say, not say anything necessarily BCH, but somebody like that.

Nina: Somebody who's got the right qualification to do that rather than trying to necessarily work it out and depending on the type of business, three or five years might be appropriate. So we would help guide them on what we think would be appropriate there.

Mark C: And given what Gus was saying earlier about how courts are seeing this and perhaps loss adjusters in some cases, if your clients just said, no, we think it's worth X, don't need it. Do you walk away from the business at that point or say, okay , that's fine. But just sign this piece of paper saying we did suggest you did this. And these are the consequences that you didn't.

Nina: We try and show them examples where we've, luckily as a business, we haven't had that many examples of underinsurance. But we've got examples where we have clients that that has happened to. So we try and show them those examples to make them realize just how important it is. And at worst, they're going to spend smaller amount of money to do evaluation, to prove that their numbers correct. So to give them that peace of mind, it's worth spending a small amount of money upfront and knowing you've got that reassurance that what you're paying for is correct. Otherwise, what is the point of having the insurance if it's not going to do what you want it to do? That sometimes people do go out of business because they haven't got the right sums insured because their claims aren't being fully paid. So it's just so important we have to keep having those discussions and making sure that they understand that and not just walking away from what can be quite a difficult conversation sometimes.

Mark C: Gus, what are some of the trends that you see? Because obviously you're picking this up at the claim's point where sometimes there might be some very big gaps between people, between what people hope they're going to get paid and what actually gets paid out.

Gus: I think the key, I mean, certainly BI is, is business interruptions generally a problem, length of indemnity periods, sums insured. I think we've certainly at Aviva, and I think a lot of the market has made some great strides in trying to alleviate those problems. So we have our BI's for the calculator tool that can help, and we've changed the word in our policies in recent years where insurance policies used to just say gross profit, which is an accountancy term, which is very different to insured profit. So there's different things that you take out. So as an example, if you have a significant event, your insured profit makes allowances for things that you'll need to keep. So perhaps in business costs, whereas your business profit would probably take those out as a saving because they're netting it down further. Length of indemnity periods, people misunderstand or perhaps it think it will be easier to get replacement equipment, replacement stock. So when you're setting up a business, there'll be a lot of planning that goes on. So you'll say, well, we ordered machinery and it came. All of a sudden you're in a claims scenario and things have changed as well in that area. So years ago, people used to have stock machinery. So if you wanted something, you picked up the phone, ordered it and it arrived. Now, most things are made to order. So lead times are much greater, and that will then impact how long in an indemnity period you need. And the inflation that we saw in terms of building materials, well, that's happened on materials from machinery as well. So some of those machines that you would have bought years ago, perhaps you're thinking it's still that kind of same cost, and it's not. It's significantly more. So it's very easy to fall into that trap because you set the business up. Customers will know their business much better than we will know their business. So we can only try and guide them and say, are you sure? And if they're adamant, maybe they do appreciate it greater than we do. But we can, I suppose, give them our shared experiences of what happens on claims and perhaps pointers for them to account for and try to alleviate.

Mark C: Well, on that point on indemnity periods, Jason, I mean, if you ask you to comment on your peers per se, but is there a point where you think there are too many people out there offering indemnity periods that's just too short? It's just not realistic.

Jason: Yeah, 12 months is not suitable for many businesses. There are opportunities where it can still work. We're increasingly working with brokers who are asking for 18, if not 24. But to be honest, by the time you look at the difference and the opportunity from realizing the full benefit, moving from 18 to 24, you may as well go to 24 months. So what we're seeing particularly is 100 grand claim is taking in excess of 12 months. Then you've got the ability to obtain, as we've talked about, the labour, the scarcity of it, as well as obviously anything involving computer circuitry or PCB. So it's incredibly difficult to get that. So there are rarely opportunities to see the value in offering 12 months indemnity period. We do because the brokers are asking us for it , and ultimately they're the ones that have assessed the wants and needs and the individual personal circumstances of the customer. But as I say, we're increasingly offering 18, if not 24 months as standard. We're working with those brokers who see the benefit and the necessity of offering the customer a choice and the difference in price. We try to obviously support the customer making the right decision as best they can. But 24 months is really, I would say, more often than not the right answer.

Mark C: Nina, can I get your thoughts on that? Also, I guess that you're playing a bit of a trade-off between length of the period plus cost, which may be an issue for some people when they're looking to or they perceive it to be a key issue for them when they're trying to sort their insurance out.

Nina: Yeah, like you were just saying, there are some circumstances where 12 months might be enough. But that's only probably going to be quite straightforward office space risks where we've all been able to work from home. So we know that more office space risks, that's fine. But where you've got machinery equipment and that kind of thing, it's not as simple as we'll just go to the building next door, we'll just rent the building next door and start again. A lot of it, again, involves conversation with the client of a saver at surveys and well, that piece of equipment, how much does that cost? Where does it come from ? Where does it have to be shipped from? Are they readily available? Is that especially made for you ? I've had examples where clients have had moulds to make their products. But that's the only mould that they've got in that property. So if that property goes and they lose that mould, they can't just move into the unit next door and start making again, even if they can get the equipment, because they haven't got the mould. It's all these extra things you have to think about when having those conversations with the client and looking at how they run their business to work out that actually, yes, a longer indemnity period is much more realistic.

Mark C: So could you almost be in a position where you said, do you know, guys, if you had two more of these models spared, you kept them in completely separate places, you'd need a lot less insurance full stop. That's the killer for your business.

Nina: That's it. Sometimes there's more than one option. And it's talking through those different options and working out what is realistic for them. For some, it would just be have some moulds somewhere else for others. It would be no, actually, let's look at the longer indemnity period and use that as a possible solution. But I mean, you've also got things that are relevant for any kind of business. Like if you had a HSE investigation, you know, the HSE don't just walk in day one and start investigating what's happened. You can have to, you know, wait months for them to come and arrive and do their investigation. In the meantime, you haven't got access to your building. You can't just get back in and carry on if it's not a full loss. You think, you know, I should be able to just go back in and carry on after a few weeks. It doesn't happen like that.

Mark C: Mark, how much do you think this is an issue that's about cost saving in a cost of living crisis? And how much is this about an educational lack of education issue?

Mark B: I think it's partly a cost saving exercise. I mean, ultimately, the stats that Jason mentioned, we see the same. So I think last year, 64% of what we valued was underinsured and the average increase of that is 60%. So in some instances, that could significantly increase premium. And you've paid for the survey to establish that fact. I think probably more than that, it's an education piece like mentioned there. It's really important that we're ensuring correctly. I think Nina mentioned right at the start that fundamentally, or Nina and Gus, our insurance is a risk transfer mechanism. So if the number isn't correct for your reinstatement, it's not going to work for you when you most need it to. I think there's an onus on everybody in the insurance industry to help with that education piece. So the origin of where that value comes from and how it's established, I think that's probably the key point to start with when was the last survey undertaken and what was the origin of it. After that, I think we can then talk of the costs of actually establishing that, which for many policies, could be relatively insignificant, conscious of the environment that we're in at the moment. But you do need it to work for you. And it pales into insignificance compared to the potential shortfall on payout that you might have if you're found to be significantly underinsured.

Mark C: So Jason, you were nodding along though.

Jason: Yeah, I think it resonates when we've done some surveys and spoke us and broke us. I mean, I think despite some modest optimism regarding the economy in certain areas, there's still a bit of a cost of business challenge and crisis going on. And what we're seeing is customers are struggling to really provide the funds to make those informed choices. And what we're seeing increasingly is that customers are increasing their assumptions insured to a degree, but perhaps not to the right level. So in essence, some extra coverage better than nothing. They acknowledge and accept the risk, but they're juggling with all of the challenges that we all know that all businesses are going through at the moment. So brokers are having some very difficult conversations. Insurers are doing their part to ensure that they can support the broker and the customer making those. But it is about making an informed choice and deciding as a business where you're going to put your money. And as I say, they 're going through a number of challenges at the moment, but increasing their insurances. We are seeing it but just not to the full level. So they're increasing their sum insured partially, but not to the full level that they really need to in order to obtain them full maximum benefit of the insurance policy. So it's a tough situation for customers.

Mark C: So, Nina, if you were looking at this from the cost perspective, rather than education perspective, and you've got a client and there's a certain amount they can afford. How do you have that conversation about what the best way is to let's call it that spend that risk budget? You know, how do you make that take place perhaps around renewals?

Nina: Yeah, it came to quite challenging. We've had a few meetings recently with clients where they said, well, we need to save X amount of money across all the services that we buy, not just insurance, everything. So it can be quite difficult when you know it is going to cost them a certain amount of money. But you can have a look at the program and try and work out what bits of cover aren’t absolutely necessary to their business and try and kind of evaluate the risk. You can look at other ways of trying to keep the cost down, like raising their excess levels and things like that. There are different things you can look at. So it's not about making sure, you know, they've got to have the right sums insured, otherwise they're only going to get a partial claim payout. Actually, are they more willing to take a higher excess and kind of take the hit that side of it rather than actually being underinsured in the first place? So it's just trying to work out where they can take the risk and how best to sort of structure the program to try and keep the cost as low as possible, but make sure it's still fit for purpose because we still need to make sure that if there's a claim, they've got the right cover in place.

Mark C: No, but does this ever get complicated by the attitudes towards risk that your client has? If you get somebody who’s quite swashbuckling who says a 5% chance of that going wrong, no we don’t need that whereas in a similar situation there’d be somebody else who’d be really worried that there was a 5% chance that that bit’s not covered. I mean, how do you, people have different attitudes towards what could go wrong in their life and I guess towards their business.

Nina: Yeah, it can be the case. Yeah, so part of that is knowing your client and sort of getting to know them, understanding sort of what their risk profile is like, who actually is decision makers in the business as well? Is the person that's got the attitude in the business? Are they the one going to be making the decision? Do we need to talk to more people in the business? Do we need to go in there with different mindsets and different thoughts about how the conversations might go based on the type of person that we've got? So we could have two people with the same scenario, but have completely different conversations, kind of tailor it to kind of the individual to try and sort of get our points across and make sure that they understand the consequences of what could happen if they do make the choice to just risk it and have not the right figures on cover.

Mark C: Gus, your thoughts around that. I mean, you've ever come across cases where the person with the most sort of relaxed attitude to risk is the one making the decisions on it, but everybody else on the board has a very different view.

Gus: Yeah, I mean, you'll find that some of the best entrepreneurs, that's exactly how they are. Yeah, they assess risk differently and they reap the rewards when it goes right . I mean, you will find, I mean, the other thing, digressing ever so slightly, is that something that insurance has brought to the market. And I think it's risk improvements. So as part of unsigned, it's not just the underinsured side, but if we sort of say, right, well, have you checked your fixed wiring, have you looked at your processes? So you can also make your business safer. And in looking at that, and when you talk about that sort of accepting of risk, have they got a business continuity plan? So have they actually thought about what could go wrong and what they would do as a consequence of that? So is there a plan in place? And I don't know if that's something that ever comes up when people are sort of coming and asking for insurance, but you should say, well, let's have a look at your plan. What, you know, have you assessed your own risks? What could go wrong? How are you going to manage those? And is there any pointers that we could give them there to say there might be a better way?

Mark C: But is there a way of quantifying that? And I'll get your thoughts there Jason, because you obviously sit there with Aviva, overseeing a lot of statistics coming out from a beaver. But is there a way we could say, actually, most people could take about, I don't know, let's make this figure up, 25% of the risk out of their business by stuff they do themselves, even before they come to Aviva or any other insurance company?

Jason: Yeah, for sure. Look, you know, in terms of how we operate in our own lives, as well as businesses, there's a perception and attitude to risk and exposure is something that varies considerably. And we've started to understand a little bit more about that in terms of, you know, behaviour analytics and understanding more about customers that have a more relaxed or perhaps a more, you know, aggressive tone to risk. But yeah, I mean, we can look and we do look to quantify that in terms of how we support customers and try to understand and give those customers the wealth of capability and services that Aviva or most insurance companies have at their availability in terms of range of services providing, you know, whether it be, you know, tools or anything that enables people to manage their business. But yeah, it's certainly something that we look at in terms of the data, but doesn't always manifest itself in terms of the end premium, perhaps. But in terms of how we support the customer in those early conversations, it's critical.

Mark C: And Nina, if clients do say we will do our own check, we will check our own wiring, for example, you know, do they always do it? Or is it easier to commit to it? And then a few months later, they must get maybe we'll do that in August when things are required.

Nina: Yeah, we do have to do quite a lot of checking sometimes just to make sure because it's, you know, the same as everybody in life and you're working life that you've got a lot of things to do. You have a very big to-do list. So we'd always go back and double check. I mean, we do in the end have to take their word for it, but we don't just sort of go, yeah, okay, that's done because they said they will. Then we do go back and forth and just double check that these things have been done. And when we go and visit, we've also got, in the back of our mind, if they say that they've had something done, we can keep an eye out for it when we go and see them.

Mark C: But we've talked a lot about this sort of underinsurance, if you like, as a method of saving on costs. But if you look at the education side of it, give us your thoughts around this, particularly this idea we discussed already that clients do and should know their business best. So if you're then going to get involved in the middle of saying, well, you do know your business best, but maybe not in this particular aspect of it. How do you get that conversation going?

Mark B: Well, I think that's a really good point that they know their business best. But in many instances, those are occupied buildings, may not know how much it costs to reinstate it. Even those that perhaps are in the building trade, for actually the reinstatement that's required for the policy, you're looking at the rebuilding cost, you're looking at the professional fees and allowance for demolitions and external works as well. And that's very, very easily overlooked and forgotten. So I think, like we said, it is the insured's responsibility after all. But the insurance professionals have got an obligation to talk to the insured and explain how they can have that checked, what it needs to include, where the origins of that number come from. And in doing so, that should inform the discussion of, okay, well, maybe that's something we need to get checked. I mentioned before, sorry, we've spoken before about the idea that it can carry over from a previous building owner, as an example. It could be a market valuation. That’s quite often the thing that customers will look at and say, well, I know this building because I 've just bought the property. They're not the same thing. So I think from an education perspective, we've just got to look at the specifics of what a reinstatement cost needs to include for the policy. And that is actually quite hard to understand, unless your business is very specifically involved in those kind of activities.

Mark C: Nina, on this education point, though, I can see that if a client said, yeah, I want to be insured for the same as last year, you can probably put the paperwork through pretty quickly. If I was being sceptical, and you're on to the next bit of business, the other end of the extreme is probably underinsurance boot camp, where you take them away for about six months to really understand risk. And there's got to be there's got to be somewhere in between those two. So as a broker how do you work out how much time it's worth spending on this before there's a point you think this could just go on forever?

Nina: Yeah, quite a lot of that, again, is around knowing your client understanding who they are, what they already might know. Sometimes our clients are quite insurance savvy. You just have to mention average, and they know what that means. Others never come across it. Don't understand at all. So it's around the conversations that you have and trying to almost sus the client out and work out how much level of detail you need to go into with that particular client to give them enough information to make the right decision, an informed decision on the insurance program.

Mark C: And as you said to somebody that this is how much insurance coverage you've got, and this is how much you need, and there's a walloping great gap, what do people do? Do they sort of run away from it? Do they go absolutely cover me completely? Or do they say, let's go for something in the middle? I'm just wondering how they sort of we've all got our behavioural traits.

Nina: Yeah, quite often in initial shock, because they're not expecting to be that big. Sometimes when the valuations come back and you find out you're 50, 60, plus percent underinsured, it can be quite a shock when they think the figure was right in the first place. So for us, we are finding that generally they do go up to the full level , but sometimes we also look at things like flexible limits of loss and that kind of thing and try and look at whether there might be other solutions to kind of make things a little bit easier for them and not quite so expensive.

Mark C: Jason, I want to get your thoughts around the shape of the under insurance that you would see as Aviva. I mean, you're big insurer, so I guess what you're seeing is probably fairly reflective of the industry as a whole, but are there obvious traits or themes within that?

Jason: Yeah, we see a greater frequency of under insurance with smaller businesses, for sure . The larger the customer, we usually see a slightly more sophisticated buyer and they understand the terms and the consequences, but the flip of that is that the sums and showed involved are material, and hence my example of two, three million actually need to be insured at five or six. So it's a challenge. We are seeing larger customers understand the consequences of the contract and they are a little bit more focused on reviewing their insurances, particularly where it's a larger portfolio. It's not uncommon for some of our customers to have hundreds of properties with us. As you can imagine, trying to arrange the insurances on those let alone be sure all are insured, they're all adequately insured. It's somewhat difficult. We do find the opportunity and it's probably a bit more common than you think where we'll ask us to check one, two, three buildings, and we'll find quite startling results. And then as the consequence of that, we 'll end up having to check hundreds and hundreds of those customers buildings are insured. So whereas obviously with our smaller customers, we integrate that into our digital journey, which brokers access. So the moment the customer, sorry, the moment the broker enters the sum insured, that they believe is accurate and the address of the customer, we're easily able to identify and say, are you sure? We just want you to check because we think there's a materiality around the context of the information that we're giving you. Please check the sum insured. Our recommendation would be the following. So we try to make it really quick because obviously in that environment, the brokers are just after a really fast quote. They are smaller customers, average premium seven to 800 pound, sometimes lower. So it's about providing timely and accurate information as fast as possible in that situation. Larger customers, we usually involve BCH or other trusted third parties to ensure that we work for a program of events, where there are more tailored solutions available.

Mark C: If you've got a case where there's a client with several hundred buildings that need looking at, just get marks on this, how quickly can you do that? Do you want to have a look at all of them? Or would you say, well, we'll do 20, we'll sample it rather than everything. And that should give us a, we can then scale up that answer. That should be sufficient.

Mark B: Well, as a surveyor, I would never say you should just sample a portfolio. The reality of the situation, like I said earlier on, is that no two properties can be the same. They might look absolutely identical. They could be in different towns. They could have different local labour issues or material challenges, or it could be in a conservation area, whereas another property isn't. So I would always say that as best as possible, you should be looking at the whole portfolio, because just because 60% of them are underinsured doesn't mean that the rest are. How quickly, I mean, it really depends. Obviously, desktop solutions in today's world are much quicker than site-based surveys. And as Jason alluded to there, I think the creation of desktop surveys has really helped in that lower premium band of the market, some insured area of the market, who previously wouldn't have instructed a surveyor to be on the ground. Timescales can be quick, but it does depend on the specifics of the portfolio to give a vague answer.

Mark C: Okay. But if I could really push, I mean, let's assume there are properties in England. There's nothing in Wales. There's nothing in Scotland. A bit of a pull towards the South East of England, a couple of hundred properties. I mean, is that a matter of weeks, months?

Mark B: Desktop surveys certainly a matter of weeks in reality. Site-based surveys, it would depend on the nuances of our team's resource to get to the site. But even that, we can be quite flexible, and other surveyors would be as well, to get them assessed as quickly as possible. So it just depends on travel and such fact, as the client's availability as well is a big point.

Mark C: And Gus, at the claims stage, what can you as an insurer do to help people and clients? In a sense, if they're a bit upset, who do they blame at that point? Is it the claims department's fault? Or do they blame themselves and think, thank you for doing a fantastic job and going a bit above and beyond to tell them out?

Gus: I certainly don't get involved in trying to assist where they apportion blame. I look at it from point of view of, you know, something's happened, we've got a problem. How can we best sort the problem out with what I've got to play with? So if you think in terms of the covers and some's insured has been a pot of money, how can I best use that? So does that mean we're looking at sort of different mitigation measures? If they're massively underinsured on the machinery side, do we try and source second-hand machinery? There's these things that you can do. You might be able to look at a building and, you know, could it be constructed in a slightly different way that's going to be more cost-effective? So the things that you can do within the claim itself, but it's much better to have the right sum insured and then you don't have to worry about those things.

Mark C: Well, we're almost out of time. So I wanted to get a final thought from each of you out of everything we've talked about today. If there was one key bit of advice you want to leave us with, what would that be? Mark, let's start with you and then we'll work our way back up the line.

Mark B: I suppose my key bit of advice would be it's the insured's responsibility to get the property sum insured correct. But what I would say is use the tools that are provided to by insurers or brokers and companies such as ourselves to make sure that is correct. Properties are a massive part of or a massive asset for most businesses and you want to make sure that's protected.

Mark C: Gus?

Gus: Perhaps people just need to consider the impacts of what could go wrong and how they'd best manage them. So make sure they understand again the risks that they've got to the business and make sure that they've got sufficient insurance in place to assist them with those.

Mark C: Nina?

Nina: If clients aren't sure how to work out their sums insured, ask us what we're here for. We know we're here to help them support them through and to make, you know, informed decisions.

Mark C: Jason, a final thought.

Jason: The data and technology is there to enable brokers, insurers and indeed customers identify where they need to be spending their time and the decisions that they need to make. We need to utilize and exploit that data.

Mark C: We have to leave it there. Thank you so much for watching. It just remains to me to thank our fantastic panellists here in the studio, Jason Chambers, Nina Gill, Gus Teruel and Mark Briggs from all of us here. Goodbye for now.