Using technology to tackle underinsurance

One-third (32%) of small and medium-sized enterprises (SMEs) don't take inflation or supply chain issues into consideration when reviewing their level of insurance, according to a recent Aviva survey.¹

With inflation continuing to rise, it can be difficult for businesses to keep on top of how the increasing cost of materials, and ongoing issues around supply chain and labour shortages, can impact their insurance policies, potentially leaving them out of pocket if they were to make a claim.

Working together with Barrett Corp & Harrington (BCH)

Through our Commercial Intelligence Tool (CIT), we can identify where businesses may be underinsured and spot potential gaps in cover.

CIT uses sophisticated modelling, based on Aviva data and that of trusted third-party valuation experts, to offer personalised insights to help businesses make informed decisions about their insurance cover.

It can estimate the costs of rebuilding most properties, including the cost of demolition and professional fees, using a range of regularly updated data sources that take into account geographical nuances in areas such as the cost of materials, equipment hire and labour rates.

Where CIT has been used, it has resulted in an average increase of 78% in sum insured, helping to make sure businesses aren't caught out by the effects of fast-rising inflation, supply chain disruption and other uncertainities.

Where CIT identifies that one or more of a customer’s premise may be underinsured, but is unable to provide a sum insured recommendation, we’re offering your client an independent valuation survey through our specialist partner Barrett Corp & Harrington (BCH) at a preferential rate.

Your underwriter will provide you with a PDF containg a weblink to a dedicated page that will make the journey as smooth as possible for you and your client.

The desk-based survey will calculate rebuild cost and provide a full report so they can make an informed decision about the level of sum insured applied on their policy. As an Aviva policyholder, this will cost £85 (plus VAT), a saving on the usual cost of £125 (plus VAT).

Jason Chambers, Head of Underwriting Automation at Aviva, said:

“Rising inflation and supply chain disruption are causing difficulties for everyone and SMEs are no exception.

In order to save money, they might be tempted to cut corners on their insurance, but that really is a false economy. We estimate that 50% of UK businesses are underinsured² to some degree, potentially leaving them seriously out of pocket in the event of a claim and possibly jeopardising their ability to stay afloat.

We appreciate that calculating the correct level of insurance is not always straightforward, so we’re delighted to offer a helping hand through CIT. This uses the latest data to estimate the right amount of cover for customers, who will be eligible for a valuation survey at a preferential rate through our specialist partner Barrett Corp & Harrington.

This is about giving customers a clean bill of health with regard to their insurance, letting them get on with running their business, safe in the knowledge that if the worst happens, they’ll be adequately covered.”

More on underinsurance and Barrett Corp & Harrington

On our dedicated underinsurance page on Aviva Broker, you can find out more about the increasing risk in today’s market and more information about our specialist partner, Barrett Corp & Harrington – including a video with their managing director, Mark Briggs.

^{1 Figures relate to a survey of 502 micro, small and medium-sized business, carried out by YouGov on behalf of Aviva in September 2022.}

^{2 Based on Aviva's modelled data on SME customers with buildings insurance, September 2022.}