When the market softens, the question is not how much the premium drops, but what the company would recover after a loss.
For many companies, the 1 January 2027 renewal arrives with good news: premiums are falling. According to Marsh’s Global Insurance Market Index for the third quarter of 2026, commercial rates fell 5% globally and 9% in Latin America and the Caribbean; in property insurance, the regional decline was 13%. The same report notes that buyers who renewed were able to secure broader coverage, higher limits, lower deductibles and more long-term agreements.
The other side of the coin is that cheaper insurance does not make the loss cheaper. Replacing an asset costs more every year: in the United States and Canada, for example, reconstruction costs rose between 3.0% and 3.8% year over year in the second quarter of 2026, according to Verisk, with labor as a key driver. And a policy that is not kept up to date can leave the company with a lower indemnity than expected.
For that reason, the question for a Risk Manager or a CFO should not stop at how much is saved on premium, but which improvements are worth requesting while the negotiation tilts in the buyer’s favor. Here are five points that make the difference when a major loss occurs.
- Up-to-date sums insured and valuation basis
If the sum insured falls below the actual replacement cost, the insurer may apply a proportional reduction to the indemnity. This is known as underinsurance, and Swiss Re warned in January 2026 that errors in insured values reduce what companies can recover in most claims. It is advisable to request an updated, independent valuation of buildings, machinery and stock on a new-for-old (replacement cost) basis, and to check whether the policy includes adjustment mechanisms when values change during the policy period.
- Business Interruption (BI) tailored to your operation
A 12-month indemnity period can fall short if critical equipment takes longer to arrive or if winning customers back takes longer than rebuilding the plant. Review the indemnity period, the extra expenses needed to keep the operation running, and the extensions for dependency on key suppliers or customers. Also look at the deductible expressed in days: a proportional deductible is preferable to one that excludes the first days of the interruption.
- Claim preparation costs
Claiming a major loss requires engineers, economists and other experts to quantify and document the damage and the losses. If the policy does not cover their fees, the company bears the cost at the worst possible moment. Ask for express coverage and a sublimit commensurate with the complexity of your risks.
- Advance payments with clear timelines
While a claim is being resolved, the company keeps paying salaries, rent and loans. A payment-on-account clause, setting out when and on what amount the insurer advances the undisputed portion of the indemnity, helps sustain liquidity during recovery.
- Sublimits, deductibles and ambiguous wording
Review the sublimits for natural perils such as earthquake or flood, debris removal and machinery breakdown, as well as the deductibles. A market in which buyers are obtaining higher limits and lower deductibles is the best time to ask for them. And ask for clarification of any wording open to more than one reading: it is far easier to resolve an ambiguity at renewal than in the middle of a claim.
How to prepare
- Work out with Finance and Operations how long it would take, and how much it would cost, to recover your operation after a serious event; that figure should guide the limits and the indemnity period. It is essential that the Insured prepares monthly budgets in line with the accounting plan (chart of accounts) of each country.
- Ask your broker to quote these improvements as options, in addition to renewal on the same terms, and compare the cost of each.
- Start the policy wording review early: clauses are negotiated better weeks before renewal, not in the final days.
Lowering the premium is good news, but the best news is having a program that responds when it is needed. Policies must be designed for major losses.
At Vantevo Claims Advisors we support organizations in the strategic management of Risks, Insurance and Claims, helping strengthen their resilience and contributing to a fair, swift and amicable resolution when a major event occurs.
Would your policy cover the cost of preparing a major claim? Tell us in the LinkedIn comments if you have already reviewed it for 1/1, or which other improvements you would ask for.