In the UK, there has been a vast change in the industry over the past five years with numerous un-rated insurers going into liquidation such as Alpha Insurance A/S and Elite Insurance Company Limited, plus reputable A-rated carriers including AmTrust International, Canopius and Ergo all exiting the market and realigning their strategies, focusing their appetite in different areas.
This resulted in many providers not being able to offer Developers a solution, or at least a financially stable, A-rated one.
Coupled with the above, the industry has also had to deal with the effects of the Covid-19 pandemic, potential impending recession, the ongoing effects of Grenfell-style cladding remediations, as well as the introduction of the Building Safety Act 2022 and rise in interest rates and inflation.
The introduction of the New Homes Quality Board (NHQB) and New Homes Ombudsman Service (NHOS) will add further change, with the framework due to be introduced at some point in the coming months.
One matter that has been suggested is the requirement to make any new residential ‘warranties’ have a minimum term of 15 years, up from the current 10 and discussions are ongoing with the Government and warranty providers as to how this may work.
Also, an issue with offshore insurers is that many are not authorised/regulated by the financial regulator in the UK and will not provide any protection to homeowners via the Financial Services Compensation Scheme, meaning they may be out of pocket and with a void policy should the insurer go into administration.