New players in London’s specialized cash in transit (CIT) coverage market could lower the premiums paid by Global security firms by “up to 20 percent” according to a bulletin from Aon’s fine art & specie team.
Aon said it welcomes the competition, and urged companies “to focus on how to prevent or control attacks to secure better premiums.”
CIT coverage is compulsory, as are the premiums paid for it. Aon explained that it “covers theft or damage of money or valuables while in storage or in transit.”
There apparently has been “little movement over the last 24 months,” but Aon added that the “market is turning with new entrants in the global marketplace. This has created competition in the London market, which provides 80-90 percent of all global cover and includes $1.5 billion capacity from Lloyd’s and London company market alone.”
Barry Vickery, director of Aon’s fine art & specie team, commented: “Now is the time to benchmark premiums and coverage with insurers, which is reflected in how we’re increasing coverage and driving premium decreases of up to 20 percent in what has been a stagnant market. Insurers hint that rates are hardening – however, we have experienced reductions for those companies with good track records that demonstrate proactive risk management plans.”
Daniel Smith, director of Aon’s fine art & specie team, added: “To secure lower rates, firms need to differentiate themselves through risk mitigation and take the time to explain this to insurers. Taking higher deductibles can also put companies in a better position to negotiate. Unfortunately there can sometimes be a gap in understanding of risk between the global security companies with dedicated risk managers and the smaller, independent firms. While negotiating the best rates, the latter need to understand the perils of only being offered an inept policy that is littered with exclusions and fails to pay in the event of a claim.”
Aon gave the following recommendations:
1. firms’ CIT risks are fully marketed to a range of insurers to benchmark premiums and engage in healthy competition;
2. time is spent with insurers to allow them to gain an understanding of the firm’s risk management and mitigation procedures;
3. broad cover is achieved to ensure claims are paid in a timely manner. A large focus has, and will continue to be, on premium spend; however, wordings can vary substantially between insurers so it is critical not to forfeit cover over premium.
Source: Aon – www.aon.com
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