Mactavish urges construction PI buyers to push brokers harder

Rising construction PI premiums could force companies out of business, and buyers need to push their brokers harder to find affordable solutions, according to Mactavish.

The consultancy said more competition was needed in the market. It urged buyers to consider using written line tenders when arranging their cover.

In recent tenders run for clients, Mactavish said this approach had enabled it to achieve savings of between 20% and 50% and improve wordings.

Written lines tenders are competitive bids in which two or more brokers are run against each other, each with their own preferred insurers and solutions.

Bruce Hepburn, CEO of Mactavish, said: “Many construction firms only use one broker to secure their insurance cover, but as highlighted in our recent Broker Conflicts Report, up to 78% of some brokers’ income is derived from insurers, rather than insurance buyers - and much of this is linked to premiums. This means that there is less incentive for brokers to work harder to acquire construction PI coverage at lower rates.”

He added: “Policyholders don’t need to accept either price hikes or poor broker representation. We encourage all our clients to think carefully about how they market and present their risks as, even in a hard market, this can make all the difference. We also recommend that buyers who aren’t being given viable solutions by their brokers run written lines tenders to inject some greater competition around who wins their business.”

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