SME insurance specialist BizCover says premiums of business policies sold through its online platform have hardly increased, contrary to what is being reported in the broader market where the hardening rate cycle has apparently forced many small to medium commercial entities to reassess their insurance options.

In the latest BizCover Insurance Price Index, overall prices increased an “immaterial” 0.6% for the December quarter from the previous three-month period. The index covers products targeted at three industry groups - Professionals, Trades and Retail - and includes public liability insurance, an area where many SMEs say rates have risen so sharply that they have been forced to close because they can’t afford the mandatory cover.

“It’s possible that customers who continue to source through traditional channels are finding the market is hardening,” BizCover CFO Simon Schwarz told insuranceNEWS.com.au today.

“But we are not finding it through our online platform. Through our platform, we can see a definite trend over many years of public liability insurance becoming cheaper gradually [and] we certainly haven’t seen cover restricted or occupation classes excluded."

Last week the Australian Small Business and Family Enterprise Ombudsman Kate Carnell warned a growing number of SMEs were being forced to shutter because of the worsening insurance crisis.

She says many cannot afford public liability and other insurance cover as insurers’ risk appetite has weakened. This is particularly the case for SMEs which are operating in high-risk businesses such as theme parks where soaring claims in recent years have outpaced the premiums charged by insurers.

But BizCover, which is partly owned by AUB Group, says its SME clients have been able to secure their insurance needs from the likes of key players such as Hollard, QBE, Vero and Lloyd’s through the platform.

“We insure most occupation classes across all platforms of insurers including those in the higher risk and they are not excluded in the index at all,” Mr Schwarz said. “And we have seen prices from those insurers for those products gradually declining.”

According to the price index, rates have moved within a tight band of 0.88-0.91 points in the period between the second quarter of the 2016/17 financial year and at the end of last December.

Policies for the Trades and Professional industry groups have seen little movement in the last 12 months while Retail experienced a moderate 3.4% rise in the December quarter.

Within the Trades category, the index fell 2.2% in the December quarter due to ongoing decreases in public liability insurance pricing.

BizCover says the price of public liability on its platform has now declined to the lowest level seen since the inception of the index in 2012.

“The price of business insurance for SMEs on BizCover’s platform has remained flat overall across the last 12 months, with only immaterial increases in the most recent quarter,” BizCover said.

“This remains good news for SME customers as the economy continues to open up following the COVID lockdowns of 2020.”