The same buildings figure for six years
A property owner's renewal goes out. The letter says, somewhere on page two, that the client should make sure the sums insured are adequate. The schedule attached shows the buildings sum insured, contents, stock, gross profit and rent. The client glances at the premium, pays, and files the letter. The buildings figure is the one they gave when the policy started years ago, perhaps increased by the insurer's index each year, perhaps not.
The broker cannot value the client's building or their business interruption exposure. What a broker can do is make sure the question is put clearly and the answer is recorded. Right now the file shows a letter was sent and nothing more.
Why the question gets ignored
A sums insured warning in a renewal letter is easy to skip. It is generic, it is not specific to the client's figures, and there is no action to take other than 'contact us if you want to change anything'. Most clients do not. The file then shows the warning was given, but not whether the client considered it.
- The prompt is a paragraph of standard text rather than the client's own figures.
- There is no simple way for the client to confirm they have checked.
- Nobody tracks which figures have not changed for years.
- Business interruption figures and indemnity periods are the least understood and the least reviewed.
- Handlers are not alerted when a client ignores the prompt.
Why a recorded answer matters
If a figure is too low, the effect at claim time depends on the policy terms and the insurer, and is not something we comment on. For the brokerage, the concern is simpler: when that claim is looked at, the file should show that the client was asked clearly about their own figures and what they said. A generic paragraph is weak evidence of that. A dated confirmation, figure by figure, is stronger.
A figure-by-figure renewal step
- Current sums insured and limits are read from your broking system for each renewing policy.
- The client receives a secure link showing each figure on its own line, such as buildings, contents, stock, gross profit and indemnity period, with a plain explanation of what each one is meant to represent, written by you.
- For each figure the client either confirms it, enters a new one, or asks for a call.
- Where your process uses them, the client can be pointed to a professional valuation or their accountant for the figures they are unsure of, with the request logged.
- Answers are recorded with the date, the client's name and the figures shown, and filed to the client record.
- Figures unchanged for a number of years you set, or where the client has not responded, create a task for the handler to raise on the renewal call.
- Changes flow into the renewal information sent to the insurer.
The explanations are yours and should be approved by your compliance function. We never suggest what any figure should be.
Evidence on the file, before and after
| Question at claim time | Generic warning | Figure-by-figure step |
|---|---|---|
| Was the client asked? | A letter was sent | Each figure shown to them, dated |
| What did they say? | Not recorded | Confirmed, changed or call requested |
| Were long-unchanged figures raised? | Unknown | Handler task logged |
| Were they pointed to a valuation? | Unknown | Recorded if offered |
Renewals with a real answer on file
Clients see their own figures laid out clearly, which gives them a real chance to notice a figure that has not moved in years. Handlers get a list of the accounts where the conversation is worth having, rather than raising sums insured with everyone or no one. And the file shows the question was asked properly.
Could this be your renewal letter?
- Your sums insured prompt is a standard paragraph.
- You cannot show which clients reviewed their figures.
- Some business interruption figures have not changed in years.
- Handlers have no list of accounts where figures look stale.