Renewals · Getting a Better Deal

Why has my business insurance gone up?

In short: Business insurance premiums rise for reasons that often have nothing to do with anything you did wrong: the cost of settling claims keeps climbing, sums insured are index-linked upwards, whole classes of insurance move through pricing cycles, and Insurance Premium Tax at 12 per cent sits on top of every increase. Some rises are fair. Some are an insurer quietly repricing you, and some are an insurer edging away from your type of business altogether. The one wrong response is to auto-renew without asking why. Call 0117 325 0027 and we’ll look at it with you.

Where the market is right now (reviewed August 2026): across most commercial lines, UK premium rates have broadly been falling, not rising — capacity is plentiful and insurers are competing hard for good risks, though the pace of softening varies by class and financial lines are easing more slowly than property. If your renewal has gone up against that backdrop, the explanation sits with your risk or your insurer — not “the market” — and that is exactly the situation a re-marketing exercise exists for.

A higher premium is a message. Read it before you pay it.

A renewal invoice is the output of a calculation you never see: your declared figures, your claims record, the insurer’s view of your trade, and the cost of the capital standing behind them. When the number jumps, one or more of those inputs moved. Working out which is the difference between paying a fair price, correcting an error, and quietly funding an insurer’s retreat from your sector.

The mechanisms that push premiums up

Claims inflation

Insurers price today for claims they will settle over the next year or more, at whatever things cost then. Vehicle parts, skilled labour, building materials, rebuild costs, court awards and care costs have all been rising, so the same accident or fire costs more to put right than it did when your last premium was set. That feeds directly into rates across property, motor and liability — for everyone, claim-free or not.

Your own claims record

A paid claim moves your price; so, sometimes, does a notified incident that never cost anything, because it changes the insurer’s picture of the risk. What matters at renewal is context — what happened, what it actually cost, what you changed afterwards — and a bare claims summary carries none of it. That is why presentation matters.

Your business got bigger

Most commercial covers are rated on exposure: turnover, wage roll, number of vehicles, value at risk. If you declared honest, higher figures this year, some premium growth simply follows the business. The flip side matters too — figures that overstate the business, because last year’s estimate was never corrected, mean you are paying for exposure you don’t have.

Index-linking of sums insured

Buildings and contents sums insured are usually index-linked, rising automatically each year with rebuild and replacement cost indices. Even at an unchanged rate, a higher sum insured produces a higher premium. It defends you against underinsurance — but indices are averages, so the figure deserves a check rather than a rubber stamp.

The market cycle

Insurance capacity moves in cycles. When results in a class are good, insurers compete in and prices soften; when losses mount, capacity withdraws, the remaining insurers become selective, and prices harden. If your class is hardening, you can be a model policyholder and still see a rise, because the price of the class itself has moved.

Reinsurance costs passed through

Insurers buy their own insurance. When reinsurance gets more expensive — after major loss events, or when reinsurers reprice whole territories and perils — that cost flows down into the premiums commercial policyholders pay. You never see this line item, but it is in your renewal all the same.

Insurance Premium Tax

IPT stands at 12 per cent on most commercial policies. It hasn’t risen — but it is charged on the premium, so every increase arrives on your invoice with another 12 per cent on top.

Cover changes hidden in the renewal terms

Sometimes the real story isn’t the premium line at all. A renewal can hold the price roughly flat while the excess doubles, an endorsement restricts a key activity, or a section quietly loses a limit. Sometimes the premium rises and the cover shrinks. Always compare documents, not just totals.

Priced up, re-rated, or is the insurer leaving?

Three different situations produce a higher number, and they call for different responses.

Priced up means the insurer still wants your business but the class costs more — claims inflation, reinsurance, the cycle. The rise is broadly in line with the market, and re-marketing will tell you whether it is fair.

Re-rated means the insurer changed its view of you: a claim, a change of activities, a different property, subcontracting patterns, something in the declared figures. Re-rating can be argued with — not by haggling, but by correcting the picture the underwriter is looking at.

Exiting the class means the insurer no longer wants risks like yours, and the renewal terms are designed to make you leave. A very steep rise with tightened terms, no negotiation and little explanation is the classic sign. There is no point pleading with an insurer that has already decided; the answer is a broker who knows which markets still want your class. If the underlying issue is the trade itself — heat, height, claims history — our hard-to-place series covers that ground in detail.

What to do about it

Three moves, in order. First, don’t auto-renew — nothing here can help you after the policy has bound. Second, ask for the breakdown: which of the mechanisms above drove your increase? Anyone who placed the risk should be able to answer. Third, have the risk properly re-marketed: a broker presents your business — figures corrected, claims explained, changes evidenced — to a spread of insurers and comes back with a like-for-like comparison. We’ve set out the full sequence on our renewal increase: what to do page, and the pre-renewal version on the renewal checklist. If the question is less “why did it rise” and more “was it ever right”, start with is my insurance too expensive?

Frequently asked questions

Why has my premium gone up when I haven’t claimed?

Because most of the drivers are market-wide, not personal. Claims inflation, reinsurance costs, index-linked sums insured and the pricing cycle in your class all move premiums for every policyholder, claim or no claim. That doesn’t make every increase fair — which of those drivers actually applies to you is exactly the question to ask.

Is a big renewal increase negotiable?

Not in the haggling sense — underwriters respond to information, not bargaining. What moves the number is a better presentation of the risk, corrected figures, evidence of what changed after a claim, and competition through a proper re-marketing exercise. No broker can promise a lower figure, but the exercise costs you nothing.

Should I just let it auto-renew?

No. Auto-renewal has its uses — it stops cover lapsing by accident — but accepting it unread means accepting whatever changed inside it: excesses, endorsements, conditions and limits as well as price. At minimum, compare the two schedules and ask for the reasons behind the difference.

Does Insurance Premium Tax make this worse?

Yes, mechanically. IPT is charged at 12 per cent on most commercial insurance premiums. The rate hasn’t changed, but because it is a percentage of the premium, every pound of increase arrives with tax on top — so the amount leaving your bank account grows faster than the underlying premium.

What if nobody will explain the increase?

Ask in writing — a professional broker or insurer should be able to say whether the change reflects your claims, your figures, a re-rating of your activities or a movement across their whole book. If you can’t get a straight answer, that is useful information in itself — and a good reason to let another broker test the market.

Get your renewal re-marketed — it costs nothing

Call 0117 325 0027 and talk it through with a broker, or send over your renewal terms or schedule and we’ll tell you honestly whether it can be beaten — and tell you just as plainly if it can’t. Bristol-based, FCA-regulated, no obligation.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.