The demand for space to store and move UK based goods has increased exponentially since the beginning of the Covid-19 pandemic.
A change in retail habits in respect of online shopping, aligned to Brexit and additional customs declarations has driven this trend further. To further increase complexities, since the beginning of the Ukraine conflict, supply chains have become increasingly stretched, with organisations seeking to obtain goods as quickly as possible.
In 2021 the UK saw a “boom” in the construction of new warehouses with figures released by the Office for National Statistics (ONS) in April 2022 reporting the value of new orders were worth £5.6bn in 2021, the highest in any year since 1985 (see figure 1 below).
The latest dataset from the ONS reveals that the value of new orders in 2022 were worth £5.7bn, marginally exceeding 2021.
This is in addition to the number of business sites now classed as transport and storage premises being 88% higher in 2021 than 10 years earlier and 21% higher than 2019. This has caused a rise in jobs within these sectors.
New Trade Deals, such as the Prime Minister’s visit to India are likely to replace the drop seen in trade with the EU since Brexit.
Within the UK, West Northamptonshire is now the ‘hub’ for logistics (the M1 corridor). It has the highest number of business premises occupied by transport and storage with 3,200, while North Northamptonshire had 2,700, the ONS said. It is therefore important that as insurers, we maintain focus on this growing sector, understanding consumer and client demand.
How will this impact our Underwriting?
There will be no immediate or sweeping change to the NIG underwriting strategy and each risk and request will continue to be discussed on merit.
Our Complex product suite already caters for Retail & Warehousing business and as such, should provide the appropriate cover required for any new or existing build or structure. Our dedicated underwriters will continue to discuss the relevant Policy coverage and extensions that would assist your clients throughout construction of a new site or any risk improvements that could be made to an existing structure or site.
For Package products, brokers can process New Business, Renewals and many Mid Term Amendments electronically and should continue to do so. Any system related referrals should be sent to the usual underwriting teams.
How can you assist our underwriting?
Our dedicated underwriting teams will seek to accommodate every request received where possible. There may be instances however where further information regarding the space or warehouse is required.
As an example, for a submission in respect of a recently built warehouse, we would require the following information as a minimum:
- Full construction details in respect of the structure and insulation
- Cubic Capacity and size of the Warehouse i.e. height of storage and floor area in sqm
- Green features e.g. Solar Panels, Battery Energy Systems (BESS) and EV Charging points
- Full exposure values (Buildings/Contents etc)
- Risk Management Features such as Fire and Intruder Alarm Specifications
- Heating Control Systems
- Health & Safety assessments/regulations/procedures in force
- Occupancy and Nature of the goods/tenants
- Are there any additional risk mitigation features such as sprinklers?
Sprinkler Systems – Are they beneficial?
A fire sprinkler system is a simple, but key, active component of a domestic or commercial building’s fire protection system. Primarily installed in ceilings or side walls, the system consists of a water supply, a water distribution piping system and sprinkler heads. The sprinkler discharges water automatically when a fire is detected, though it is not triggered by smoke. It controls or extinguishes the fire, so is both a fire detection and suppression system.
Although the systems can be extremely expensive to install, their presence is often extremely beneficial. According to RISC Authority publications and research, 80% of all fires in suitably sprinklered risks are controlled with one head. They also provide enhanced life safety in the event of the fire and allow management of evacuation times, heightening the ability for the Fire Brigade to enter a protected building.
Our underwriters will continue to review each case on merit, but seek clarity and the risk mitigation benefits that a risk may contain when a sprinkler system is present.
Risk Assist & Risk Surveyors
Our Risk Assist offering remains available to provide you and your clients with additional information in respect of managing exposures or requests for your clients. This facility provides a wealth of useful information to assist in managing operations on a day-to-day basis.
Our survey team also remain on the road throughout 2023 and as such, will be available to offer their assistance in respect of mitigating risk to your sites.
Open for Business
Finally, we would like to remind our brokers and partners that we are very much open for business and keen to work with you. We can be contacted by e-mail, telephone, or in some instances by live chat. Please continue to talk to us as we remain committed to supporting you and your clients.