Why Property Insurance Premiums will increase by at least 15% in 2022

As specialists in Business Property Insurance and Personal Property Insurance, we at Lansdowne Woodward want to provide you with insight as to why commercial property insurance premiums are set to rise by at least 15% in 2022. Read on to learn more about how rebuild costs, Covid-19 and Storms Dennis and Ciara have led to this predicted surge in property insurance premiums.

Rebuild costs will continue to escalate

What is contributing to the increase in rebuild costs?

Lorry Driver Shortages and Increased Fuel Prices

The continued UK lorry driver shortage combined with fuel prices has led to a major rise in the costs of transporting materials. As a result, manufacturers have to factor this in when pricing their materials.

Rising energy costs

Rising energy costs are also increasing rebuild costs. Key construction materials such as wood and steel utilise significant energy costs when produced, and such costs are then passed on. For example, British Steel have added a £30 per tonne surcharge to offset these rising energy costs.

Material Shortages and Labour Cost Increases due to Covid-19

Why has material shortages and labour cost increased?

Continued Material Shortage

The UK’s exit from the EU, the Covid-19 pandemic, along with the knock-on effect of lorry driver shortages has also contributed to the dwindling supplies of key building materials.

Labour shortage in the construction industry

In the UK, some construction companies are reporting that they are paying up to 25% more for labour costs to attract the trades they need. This could potentially drop as furlough has ended, but as it stands the increase in demand for construction work has led to the increase in labour costs. This, linked with the reduced labour availability caused by the pandemic.

Impact of Storms Dennis and Ciara

Additionally, the damage caused by storms Dennis and Ciara is set to cost the insurance industry more than £360 million, according to Sky News. This is comprised of domestic and commercial property flood claims, domestic and commercial windstorm claims and motor claims.

Trust Lansdowne Woodward as your Specialist Insurance Brokers

Lansdowne Woodward are truly independent, owner-managed insurance brokers. We live by traditional values; our experienced staff provide you with a truly personal and bespoke service offering business insurance to customers across the South, including Dorset, Hampshire and London.

To discuss your personal or business insurance requirements with a member of our team, don’t hesitate to contact us today through our website or on 01202 874 989.