The property and casualty market remains challenging overall, but a shift started to be seen toward the end of the June quarter around pricing and increased levels of competition for “good risks”, Honan says in its latest quarterly update.

Distressed property risks have seen rate increases exceeding 25% and with coverage reductions and limited capacity, while pricing gains for good risks eased in the quarter to around 5-7.5% compared with 10-15% in the March period.

The casualty segment continues to see further increases in rates as profitability remains poor and insurers are more conservative in deploying capacity.

“This is coupled with the need for greater levels of management approval,” the update says.

Overseas markets such as Singapore are playing a crucial role for placing certain risks and Honan says its use of the Singapore market has increased due to interest from insurers that are more open to quoting Australian risks to diversify their portfolios.

The report also points to tough conditions in the cyber market, with implications from the recent Kaseya ransomware event, while positive signs have emerged in the directors’ and officers’ area.

A strata and real estate snapshot notes the market continues to harden at varied rates depending on the sector.

Honan sees residential strata premium increases of around 10% nationally continuing, commercial property premium increases are trending higher at 15-20% for strata, while rates are rising 5-10% for non-strata and upwards of 30% for industrial buildings with high-hazard activities.

“For commercial tenancies, insurers continue to be wary of ‘high risk’ occupations such as tattoo parlours, dry cleaners, recyclers, and restaurants with wok cooking or deep fat fryers over 20 litres,” the report says.

Reinsurers and other securities have been reticent about capacity in the professional indemnity market for real estate agents, largely driven by the increased occurrence and severity of bodily injury claims relating to property management services, and also litigation becoming more prevalent.

In workers’ compensation, liabilities associated with working from home and work-related mental injury claims continue to challenge the market.

“This, coupled with the mismanagement of accepted claims has resulted in increased premium for clients,” the report says.

“We have identified a gradual increase in the prevalence of liability exposures and subsequent claims activity.”