Question & answer

Each issue, a Hiscox or third-party representative will answer your questions. Send yours to .(JavaScript must be enabled to view this email address)

Why does Hiscox charge a higher premium on many of its products in the current economic environment, when its competitors are willing to be more competitive?
Nina Nash, Department Manager of Private Clients, Lucas Fettes & Partner

A: Austyn Tusler, Head of Art and Private Client:
We, like all insurers, have to balance what’s coming in (premium) against what’s going out (expenses, commissions and claims) in order to make an underwriting profit and maintain a sustainable business that meets the needs of our clients and shareholders. Our pricing needs to allow us to offer the best cover in the sectors we operate in, uphold our superior customer service and keep our promises to pay in the event of a loss.

Consumers, quite rightly, demand value for money. Insurers are having to balance their ability to honour their commitments to their customers with the market forces that push premiums both up and down. Across the market, rates have been in decline for six years and margins have been eroded substantially. We have made the decision to protect our offering and are setting prices accordingly.

If clients value the exceptional levels of cover and service we provide them with, they will pay a fair price for it. If they are not happy paying a fair price, they may get cover elsewhere – although this could be a false economy in the long run when they come to claim and haven’t got the product they thought they had. Inadequate pricing is not sustainable in the long term and will ultimately lead to loss of reputation, which is irrecoverable.