What's Happening?
A recent survey conducted by MGA Prestige Underwriting has revealed significant concerns among brokers in the non-standard insurance market regarding underinsurance. The survey, which polled 99 brokers between February 3 and March 3, 2025, found that 84% of respondents believe current premium levels are affecting their clients' ability to maintain adequate coverage. Additionally, 92% of brokers indicated that non-standard customers are particularly vulnerable due to efforts to economize on insurance costs. The survey highlights structural constraints such as outdated rebuild valuations for flood-prone properties and thatched homes, as well as a shrinking pool of expert contractors, exacerbating underinsurance issues.
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Why It's Important?
The findings underscore the urgent need for innovation and flexibility in non-standard insurance offerings. Economic pressures are squeezing both brokers and their clients, necessitating tailored solutions to address unique circumstances. The survey also reveals a lack of customization in current insurance products, with only 47% of brokers agreeing that existing offerings meet their clients' specific needs. This indicates a substantial market gap for bespoke solutions catering to diverse and complex requirements. The industry must adapt to these evolving needs to prevent underinsurance and ensure adequate coverage for non-standard customers.
What's Next?
Prestige Underwriting is committed to collaborating with brokers to develop products and services that bridge the gap in the non-standard insurance market. The firm emphasizes the importance of listening to brokers and adapting to their clients' evolving needs. As economic pressures continue, the industry is expected to focus on creating more customized insurance solutions to address the specific challenges faced by non-standard customers. This may involve partnerships and innovative product launches to better serve this segment.
Beyond the Headlines
The survey results highlight broader implications for the insurance industry, including the need for ethical considerations in providing adequate coverage for vulnerable properties. The reliance on outdated valuations and the shrinking pool of specialists may prompt discussions on regulatory changes and industry standards to ensure fair and comprehensive insurance practices. Long-term shifts could include increased collaboration between insurers and brokers to develop more relevant and adaptable insurance products.
