Broker Expo 2025: it’s time we tackled underinsurance with data integrity

Fresh from Broker Expo 2025, BCIS executive director Richard MacLean dives into underinsurance and the part that data integrity can perform in creating better outcomes for insurers, brokers and their clients.

Broker Expo 2025: it’s time we tackled underinsurance with data integrity

Opportunities to temperature check challenges in insurance don’t come better than the annual Broker Expo and this year’s congregation of professionals from across the sector did not disappoint.

One reading was clear – underinsurance is as much a burning topic for brokers as it is for insurers and solving it will require a bigger commitment to data integrity.

Conversations on the day proved underinsurance (and by this I’m speaking specifically in the context of buildings insurance) is a widespread and recognised issue, but one that is missing an effective, layered solution.

Brokers, like insurers, feel the problem is getting worse and believe the root cause is primarily a lack of access to reliable data. In most cases, this starts with the homeowner having the considerable responsibility of providing a reinstatement cost to their insurer or broker with a limited understanding of the risk of underinsurance or how the reinstatement cost is formed.

Insurance professionals are trying to improve clients’ understanding, despite not being mandated to do so, but this is ultimately making little difference.

Throw in the added challenge that many homeowners have neither the time, money nor inclination to have reinstatement cost assessments carried out regularly, and you have a recipe for outdated values, incorrect index-linking and inappropriate cover.

^{The BCIS Broker Expo team, from left to right: Rajan Henderson-Morrow, Neil Thompson, Richard MacLean, and Anthony Struwig.}

From speaking to Expo attendees, it’s clear weeding out underinsurance calls for better access to and use of reliable data.

Some property owners use a market value or bedroom rating to inform the reinstatement figure they provide to insurers. But market value has no correlation with reinstatement cost. The latter covers not only materials and labour but also demolition and site clearance, making safe adjoining properties, and the associated professional and planning fees.

This is problematic because ongoing increases in plant, labour and materials costs mean changes to an asset’s rebuild value are likely misaligning with any movement in its market value. The double digits construction cost inflation in 2022 exacerbated the issue.

As a first port of call, insurers are actively encouraging property owners to use the free BCIS/ABI Public Rebuild Calculator – an online tool that covers the average housing stock and provides an estimate of an asset’s reinstatement cost.

While this is certainly a useful starting point, it’s more of a top-level aid to check the level of cover and reducing underinsurance risk.

A second tier – that is, using the wider BCIS service and its capability to undertake more granular rebuild cost reporting – is required.

The service’s unique construction cost and property data can be used by property portfolio owners, brokers and/or insurers to produce reliable rebuild cost reports in a matter of seconds.

The speed, cost and greater accuracy benefits of using the BCIS service are a significant step up from rough estimates and can be used to directly inform premiums, or as a high-quality basis for the third tier – having a full, on-site survey carried out by a building surveyor to narrow down the reinstatement cost further.

What BCIS is able to offer insurers, brokers and their clients is efficient access to the right data and tools to hit, not miss, the reinstatement mark with a standardised methodology.

This methodology involves tailoring the final reinstatement cost to account for movement in the construction costs (i.e. materials, labour and plant) that influence it.

While this is not a replacement for the specialist assessment that a surveyor can conduct in an on-site survey, it’s a high-quality, reliable answer to the chronic level of underinsurance we’re seeing across UK property today.

And if the Broker Expo was anything to go by, insurance is a sector geared up for digital solutions.

Brokers and insurers alike are increasingly coming round to desktop tools, automation and AI to improve everything from claims triage to compliance, and there seems a real desire to embed a digital approach to tackle underinsurance, and overinsurance, risks.

Why? Because tools like BCIS’s rebuild cost reporting functionality offer data integrity – a means of fine-tuning that initial reinstatement figure and setting buildings insurance premiums on the right track thereafter.

As the problem of underinsurance persists, it’s time for the insurance sector to fully embrace a more digital, data-driven approach to achieve better outcomes for all.

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