In its recent report, the trade organisation outlined the pros and cons of evergreen policy, where the period runs in perpetuity until either of the notice parties (the insured or the insurer) gives a year’s notice to renegotiate the policy, in relation to construction insurance.
Among the benefits for insurers would be more control, improved client relations and better retention rates.
On the other hand, potential challenges may include purchasing the wrong level of reinsurance and regulatory issues.
Oliver Scott, author of the report, said: “The introduction of evergreen policies into the construction insurance market is a positive move, and is one which allows benefits to be felt by all involved. Evergreen policies are the future of construction insurance.
“The biggest benefit will be felt by the clients, as they will be on the receiving end of the increased attention and servicing that insurers and insurance brokers can now afford to provide. In a world where the client comes first and service levels are paramount, this surely must be a good thing.”
Matthew Connell, director of policy and public affairs at the CII, said: “In order to increase trust in our united profession, it is vitally important to consider unmet needs and how to address them.
“This is a thought-provoking report, which clearly details the pros and cons for the profession of taking action to introduce evergreen policies to the construction market.”