Chubb will withdraw its Home insurance product from the Australian market from March, the insurer said in a business update to its intermediary partners.

The decision from Chubb follows recent moves by insurers to cut broker commissions for home and landlords products as the industry tries to return the loss-making householders line to profitability.

Chubb says the Home product has faced a “volatile” three-year period, impacted by continued and extreme natural catastrophe events and claims inflation, according to a copy of the business update seen by insuranceNEWS.com.au.

“Despite recent rate adjustments, we have now taken the difficult decision to withdraw the Chubb Home product from the Australian market,” the business update sent on Wednesday says.

“Chubb Home renewals and new business will cease to be available from the 1st of March 2024. This means you can still continue to provide the Chubb Home policy to your clients for a further three months, until the end of February 2024.”

The insurer launched Chubb Home in 2019, targeting mid-net-worth individuals whose sum insured are below the eligibility criteria of its prestige Chubb Masterpiece offering. Masterpiece requires clients to have a building sum insured of more than $1.5 million.

insuranceNEWS.com.au has reached out to Chubb for comment.

Chubb says there will be no changes to its Masterpiece offering. 

“As the pioneer of High Net Worth Home & Contents in the Australian market, Chubb remains committed to our Masterpiece business and growth, including continuing to invest in the Chubb and Masterpiece brands through our high profile sponsorship of the Australian Open tennis this coming January,” the business update says.

Brokers told insuranceNEWS.com.au the householders line remains challenging despite the hefty price increases insurers have made to address claims inflation, rising reinsurance costs and other cost pressures.

Australian Risk Advisers MD Paul Murphy is not surprised by Chubb’s decision to withdraw the Chubb Home product.
 
“It’s a good product but the last three, four years have been tough for everyone. Many are struggling to make money and it’s a very difficult market at the moment in Australia,” Mr Murphy said, referring to the householders line.
 
“On average insurers are paying $200 in claims for every $100 they get in premium. It’s not sustainable.”

A broker in regional Victoria says Chubb has raised premiums for the Chubb Home product by up to 100% over the past year and their risk appetite has been very selective.

“Anything outside of the metro areas on new business, they basically are not taking it. Their pricing on renewals have increased dramatically, so they won’t be getting new business and they are also losing their existing business,” he told insuranceNEWS.com.au.
 
“The loss ratio in the domestic market at the moment for insurance companies is terrible.”

QBE confirmed today it has adjusted the maximum commission on QBE home products sold via the Steadfast Client Trading Platform to 17.5%, effective March 1 next year. The current rate is 20%.

“QBE regularly reviews broker commissions on all products. Our impending adjustment to the maximum commission on home products sold through the SCTP… will align SCTP to our standard market commission,” a spokesperson said.

“We greatly value the relationship between Steadfast and QBE, and will continue to support brokers during this transition.”

Blue Zebra has also made changes to the maximum commission rate paid to brokers for its home and landlords products on SCTP, reducing it to 20% on January 1 from a maximum 25% presently.
 
“Reinsurance costs have continued to rise and we have compound inflation over a number of years following the increase in catastrophes,” MD Colin Fagen told insuranceNEWS.com.au.