The Financial Conduct Authority (FCA) has published its anticipated report on the insurance market for multi occupancy buildings.
Many homeowners have seen large levels of premium increase as insurers have left the market, and premiums have risen well above historic levels. (see earlier news items, case studies and FAQ’s on this site).
The FCA worked with a large sample of insurers and brokers active in the sector, to understand the drivers of cost increases, and identify possible solutions. It has now invited further responses from interested parties to some of its proposals. It will comment further in 6 months’ time.
In the interim, Simon Clarke, the new Housing Secretary, has written to leading insurance market figures, requiring them to start fixing the underlying problems.
While there is some way to go in this process, government interest will certainly sharpen the insurance industry minds.
We like the principle of insurers pooling risks between them. This approach has been used successfully in the past to find solutions for otherwise hard to insure terrorism and flood risks.
It seems unlikely that these moves will have a huge impact on our next renewal in March 2023. The biggest hurdle is for government to unlock the uncertainties that remain in its recent legislation on remediation funding for buildings with fire safety defects.
We welcome the direction of travel however, because routes must be found for homeowners to access insurance at a reasonably affordable cost.