Property - Introduction

Commercial rates have plummeted dramatically in the last two years. In 2005, it is estimated that GWP declined by 7.4 percentage points, and with an upturn not expected until 2008, this is a difficult market (page 6).

Insuring commercial property is highly precarious. The ABI shows that last year £790m was paid out in commercial fire claims alone - 60% up from the previous year (page 21).

Additionally, the cost to businesses in terms of disruption to their operations owing to fires increased to £220m, the highest level since 1997. This year's numbers are likely to be even higher because of claims from the Buncefield oil depot fire.

Worrying statistics dominate all aspects of the property market. Crime-related business insurance claims rose 6% in the first three months of this year and business crime is costing SMEs over £700m a year (page 10).

But the broker can play a key role in finding the correct insurance for an SME, with the potential to bring the cost of insurance down.

And in the on-going battle of direct writers versus brokers in the commercial property arena, brokers can show they have the upper hand. Cover not provided by a broker can be limited, as the property owner receives no independent professional advice (page 15).

Properties abroad, usually a second home, can be covered under a normal household policy, but there are considerations relating to the extent to which UK-based insurers will be willing to cover overseas risks (page 24).

And buy-to-let property investment has been one of the UK's highest growth industries in recent years (page 37) but the buy-to-let insurance world is something of a minefield of complex sub-clauses. And with this comes another opportunity for brokers to exploit.