Reasons why your premium could change

If you’re ready to renew your business insurance and have noticed an increase in your yearly premium, don’t worry – you’re not alone. There are any number of reasons why a premium might have increased.

So, if you’re hoping to understand why that might be, we’ve put together a list of some of the most common reasons why insurance premiums typically increase.

Rising inflation

Recently, we’ve been seeing ongoing increases in the cost of goods and services. There are several notable factors that contribute to these increases, such as rising energy costs and supply chain disruption. As a result, the cost of labour and materials is on the rise, too.

But what does that mean for our customers? Well, rising inflation generally means that it’s more expense to complete repairs and therefore pay out on a claim.

You’ve made a claim in your current period of insurance

If you need to make a claim during your time insured with us, it won’t affect your price right away. But you might notice an increase in your price when it’s time for renewal. As you might expect, customers with fewer – or no – claims tend to pay less for insurance.

It’s also worth noting that the frequency of claims is increasing more generally as, too, as we see more extreme weather events such as floods and storms. So, if you have a property, this can also impact premium levels more broadly.

You were benefitting from a promotional discount that has now ended

When you joined us, you might have qualified for a promotional discount. These discounts typically only last for your 1st year of cover with us. So, if you’re staying with us after your first year then it’s likely that you’ll now be paying full price for your policy.

Why changes to your details could increase your premium

It’s important to ensure that your details are always up to date as this means that we can make sure you’ve got the cover you need. This also makes sure that we’ve got the right details on record to help sort things out if you need to make a claim.

Telling us about and changes means that there may be a change in your risk level – if this happens, your premium will change to reflect your level of risk. If you don’t tell us about any changes then your policy may become invalid.

You can tell us about any changes by logging into your AXA account.

Here are some examples of what details you might update that will affect your price:

You’ve added another cover/optional extra

When you’re insured with us, you can add new covers and optional extras of your choosing onto your policy at any time. However, when you add new covers to your policy, your premium will increase to reflect this extra protection.

The size of your business

This is determined by your business’ revenue and the number of employees you have. Businesses with higher revenue with more employees generally have higher premiums as these businesses require a higher level of cover.

What the money you pay covers

We think it’s important that you know where your money is going and what its used for. So, we’re broken it down to make it easy to understand.


Paying claims is at the heart of what we do – after all, that’s the reason you buy insurance. So, of course, a portion of your premium goes towards the cost of claims.


Like any business, expenses are necessary to keep us running. So, some of your premium goes towards employee salaries and the cost of keeping our offices running. Some of that money also goes towards investing in the most innovative technologies to make your experiences with us as smooth and simple as possible.

Insurance Premium Tax (IPT)

12% tax is automatically added to every insurance premium by the Government, and unfortunately IPT can’t be claimed as a business expense. However, we work hard to make sure that the Government understands the impact this tax has on our customers and help them understand that 12% is sufficient.

Reinsurance / Industry Levies

Like all insurers, we pay into various funds that are set up to protect you, our valued customers. For example, the Financial Services Compensation Scheme (FSCS) which protects you against an insurer going bust.


Every business needs to make a profit to exist and we’re no different. But the level of profit we make may not be as much as you think. In any case, our profits mean we can keep on protecting you and your business year after year.