For most businesses, insurance renewal is an annual ritual that involves gathering updated figures, completing proposal forms, then waiting to hear back from your broker on what the market has responded with, and hoping the premium hasn’t climbed.
It however doesn’t have to work that way, nor does it have to be that time consuming. A long-term agreement (LTA) can give you price certainty and a simpler process for two or even three years at a time.
What is a long-term agreement?
Instead of a standard 12-month policy, a long-term agreement covers a longer period. The most common structures are:
- 1+1: a one-year policy with an agreed renewal for a second year on pre-set terms.
- 1+1+1: a one-year policy with agreed renewals for a second and third year.
In each case, the core benefit is the same: the terms and pricing for the following year are agreed upfront, rather than renegotiated from scratch every 12 months.
Why consider a longer contract?
Protection from market increases
Insurance markets move in cycles. When capacity tightens or a sector sees a wave of losses, premiums can rise across the board, even for businesses with a clean record. A long-term agreement locks in next year’s pricing, so a general market hardening doesn’t land on your desk at renewal.
A simpler renewal process
With an LTA in place, there’s no need to run a full re-underwriting exercise each year. Instead of extensive proposal forms and fresh market submissions, renewal becomes a straightforward check that your business hasn’t materially changed. That saves time for your finance and management teams and makes budgeting far easier.
Budget certainty
Knowing your insurance costs for the next two or three years lets you plan with confidence. For growing businesses, fixed costs are one less variable to manage.
What are the conditions?
Insurers offer this pricing certainty on the understanding that the risk they’re covering stays broadly the same. Typically, the agreed terms continue to apply as long as:
- Revenue doesn’t increase or decrease by more than 20%.
- Assets don’t increase or decrease by more than 20%.
- No claims have been made during the period.
- No major changes in market conditions have occurred.
If any of these conditions are triggered, the insurer may review the terms, much as they would at a normal annual renewal. So you’re never worse off than with a standard 12-month approach, and in a stable year you benefit from guaranteed pricing and a lighter process.
Is a long-term agreement right for you?
LTAs tend to suit businesses that:
- Have a stable, predictable trading profile.
- Value budget certainty over chasing the lowest possible premium each year.
- Want to reduce the administrative burden of annual renewals.
- Are concerned about rising premiums in their sector.
If your business is expecting rapid growth, a major acquisition, or significant restructuring, a standard annual policy may offer more flexibility. We can help you weigh up the options.
Ready to Lock In Your Premium?
Every renewal you go through without a long-term agreement leaves you open to the next market increase. If your business is stable, you could secure your pricing for the next two or three years and skip the annual underwriting process.
It only takes a short conversation to find out if you qualify. Our team will:
- Review your current policies and renewal dates
- Check which of your covers can move to a 1+1 or 1+1+1 structure
- Explain the conditions clearly so there are no surprises
Whether your renewal is coming up or you need a new policy, now is the time to ask.
