FIS has been listening to its members who have felt increasingly frustrated by the lack of real support from the insurance industry, as appetite has become restricted and where cover is available it is universally increased and, in some circumstances, it has become uncommercial and very difficult to place.
In a survey conducted by FIS at the start of the summer it was identified that around 90% of members have experienced rising insurance costs over the past three years. Further that, over half of the respondents had experienced difficulty in securing insurance and 60% of respondents believe that the price of insurance is now a problem to their business. Key concerns raised through our research were a need to switch to aggregate cover in order to get any insurance at all and having to deal with onerous endorsements within Professional Indemnity Insurance that prohibited certain key tasks, curtailing those jobs that our membership could take on.
This cannot continue; in reaction to these findings and further dialogue with our members, FIS has reviewed the options and is planning further intervention including setting up a new facility to broker insurance for members. The aim is to establish FIS Insurance Services (FIiNIS) as ‘cooperative’ insurance brokerage and risk management advisory service. The brokerage will be run in partnership with Construction Shield and will support FIS in advising on and of providing insurance-related services.
Commenting on the announcement FIS CEO Iain McIlwee stated:
“We keep coming back to the realisation that there is a fundamental breakdown in the way that we are engaging with the insurance sector. This needs to start with a clearer understanding of the risks, interrogating claims data and looking to support an ongoing improvement in quality and risk management. This isn’t just about cheaper cover, but about transparency and a new and holistic approach to risk management that will help us support individual members and sectoral change.
Through this open brokerage approach, built around the FIS PPP Quality Framework, our aim is to establish a new relationship with the insurance sector, separating legacy from future works and targeting better provision built around the needs and risks of our sector. By doing this as a co-operative we can share the upside back with those companies that are effectively managing the risks.
In time it is an aspiration to look at the potential to evolve this co-operative approach to the natural progression of becoming an insurance mutual – we are a vast industry and taking a position in our own risk makes a lot of sense.”
Over the next few months, FIS Insurance partner Construction Shield will be reaching out to members, helping to analyse the cover they have and vitally don’t have with a view to offering tailored and targeted packages exclusively to companies signed up to the FIS Ongoing Vetting Process.
James Reid, Chief Executive at Construction Shield said:
We are delighted to be in partnership with the FIS on this project to help re-address the balance between genuine risk management and risk transfer. It is clear that the FIS leadership have heard and reacted to the voice of its membership and it is for the membership to now join together strategically to put the buyers of insurance in a stronger and more stable bargaining position in a hardening ‘traditional’ insurance market. With genuine risk management, the championing of best practise and greater understanding of activities there is no reason why insurers and insureds alike cannot come to a commercial sensible compromise between the availability of cover and the cost of proper risk transfer. We, like FIS, are excited to be able to build this meaningful project together for the benefit of its membership.