Following the latest economic news has become a pastime for many of us who once didn’t care a jot about what was happening. For businesses too, especially the smaller companies, it’s important to follow the global economic downturn with all its twists and turns.
Once it was terrorist activity and political instability that caused a country’s financial strength to ebb and wane. Whilst this is still undoubtedly true, the operations of the Insurance market is now dominated by the general global economic recession. The words restructuring, refreshing, redundancy and recession are bandied about daily on our TV and broadsheet news. We all know it means a loss of jobs, less money to spend and inevitably a company closing. All these things affect people as they go about their daily lives. Gone is the “devil may care” attitude of “I have a job and nothing to fear”. Everyone has something to lose and no-one wants to lose it.
There can be no doubt that “real incomes” have shrunk. The British economy is depressed to the point that a daily “Misery Index” charts the current inflation rate. It’s currently pretty high – matching the unemployment rate. It’s possible that 2012 will bring some hope of improvement, but the economic news isn’t looking good for the lead up to Christmas 2011.
It will fall to the Insurance companies to help cushion the risks for both individual consumers and businesses. The “liability risk profile” of a business can fluctuate wildly in a short amount of time and Insurance companies will be there to act as a net at such times. It’s some comfort.