From the growing cyber threat to sector funding cuts, to rising operating and energy costs, to crumbling infrastructure – our higher education partners had many challenges to navigate in 2023. But insurance rates for the sector look to be showing signs of recovery.

You can read our full state of the sector report here.

If you need a quick summary, we’ve picked out the main take aways…

Insurance costs show signs of stability

Slips, trips and falls remain the biggest source of claims, making up 61% of cases in the 12 months up to October 2023. We’re also seeing more data breach claims surfacing, usually as a result of phishing attacks.

And there’s still a steady level of mental health cases coming through, but not many of them have been successful. The rise in cases shouldn’t be underestimated, though, and institutions need to handle the issue with care.

In spite of these challenges, Insurance rates are stabilising, with future insurance costs looking more positive for the sector.

Cyber risk is sector’s biggest concern

As of October 2023, IT researcher KonBriefing reports a significant increase in cyber attacks in the last 12 months on colleges and universities around the globe compared to 2022.

Although organisations need to be extra vigilant with the cyber threat, it shouldn’t come at the expense of the rest of their risk portfolio. We’ve mapped out the key industry-specific risks on page eight of the report, grading each of them high to low, so that clients can make sure their risk management covers all bases.

Universities feel the financial heat

From rising energy costs to inflation to providing extra cost-of-living support to staff and students, organisations are feeling the financial pressure from every angle. And with no increase in tuition fees planned by government, funding could be at its lowest by 2025/26.

Research grants are way down too, threatening the ability of the UK to remain globally competitive and fulfil government ambitions to be a science superpower.

Universities turn up their support for students

Students are also suffering financially, with many feeling the impact on their studies and not being able to enjoy their university experience to the fullest.

However, universities are doing what they can to support them – offering food vouchers and discounts, setting up cost-of-living working groups, and, in some cases, even making cash payments.

RAAC and water leaks cause disruption

More universities are finding reinforced autoclaved aerated concrete (RAAC) in their estates, with more cases likely to follow. Insurers are also seeing an increase in water leaks from pipework, and fear overriding fear is that it might be a latency issue.

In the 70s, a global oil crisis meant that copper was in very short supply, and, as a result, British Standard pipework became more expensive to source. Organisations then turned to cheaper alternatives with shorter lifespans. The recent water leaks suggest it might now be coming back around to haunt them.

The potential damage from water leaks can be significant, so we recommend that clients get ahead – investigating their pipework and identifying areas they need to replace.

Cost of energy on campus rises by 43%

In the past 12 months, the cost of energy rose from £400m to £574m, and now accounts for 23.9% of total property cost in the sector. Reducing estates and increasing remote study could be a vital cost saver for institutions.

We’ve only just touched the surface of the report here. Click the link above to download your full copy of our report.

Sources:

https://rmpartners.co.uk/state-of-the-nation-report-2023-higher-education/

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Readers should not act upon (or refrain from acting upon) information in this article and related document links without first taking further specialist or professional advice.

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