Growing your business shouldn't mean your premiums grow too

Scalability and growth are key goals for many businesses. You have a solution to a problem, so you want as many people to be able to access it as possible, growing your company and revenues as a result.

You might think that faster growth and more revenue generation will lead to higher insurance premiums — especially for complex tech firms — right? Not necessarily. Here’s why.

The current insurance market

Insurance markets can shift between being 'soft' or 'hard.' Right now, we're in a soft market and that can work to your advantage. But what does it really mean?

A soft insurance market is a time when insurers are competing for your business. It’s characterised by lower premiums, more flexible terms and broader coverage options. With plenty of options available, insurers may be more willing to negotiate on price and provide more generous terms to win your business.

For high-growth and complex businesses, this is a great time to shop around, review your policies, and secure better deals or improved coverage. You might find that you can lower your costs while still protecting what matters most.

However, it's important to stay smart. While the offers may be appealing, ensuring you’re getting the right coverage for your specific needs should always be the priority. A low price is great, but not at the cost of inadequate protection.

A good broker should provide you with a comparable option at renewal — one that’s as competitive, if not more so than your last premium, even if your revenue has increased.

Growing revenues and insurance

Every company strives to increase revenue, become profitable and achieve financial success. The current competitive nature of funding rounds can require aggressive measures to ensure your company remains attractive to a top talent pool that continuously drives innovation as well as retaining high-calibre investment.

But an increase in revenue is also a really positive sign of the stability of your business. But what does this mean for your business insurance?

As your revenue grows, it often means you’ll have to consider increasing your limits on policies, for example, your professional indemnity insurance.

When negotiating with insurers, a good broker will highlight the stability and positive growth of your business. So while your revenue and limits have increased, the risk you pose will likely have decreased. This should be reflected in your premium change.

If you’re in a position where your revenue has increased by 30% or more, then things change a little. Growth of this level will likely be reflected by an increased premium. But a skilled broker would look to increase your limits to match the increased premium, meaning you get more for your money.

Working with brokers

Insurance brokers are there to work on your behalf. They should understand your company inside out and therefore be able to effectively negotiate with insurers for you.

It’s your broker's responsibility to make sure you’re able to get the most competitive options available, whether it’s a soft or hard market.

As we’re in a buyers’ market, you should be in a position to forecast a decrease in premium spend this year when you’re renewing. If your broker isn’t doing this, then reach out to one who will. Changing brokers is much more simple than you think. Get in touch to learn how.