Major underwriting agency SRS is experiencing a four-fold increase in slips being directed to it by brokers – a reliable indication that the market is hardening in the wake of disasters in Australia, NZ and Japan.

“It’s the biggest increase in slips I’ve seen since immediately after September 11 [2001],” CEO Paul Lynam told insuranceNEWS.com.au.

Brisbane-based SRS is the largest Lloyd’s underwriting agency in Australia, covering most sectors of the commercial market.

“If insurers are pushing up quotes and knocking back risks to this extent, you’d have to surmise the market is now hardening quickly,” Mr Lynam said.

He says SRS underwriters “are seeing stuff we haven’t seen for a very long time”.

“I’m being contacted by brokers wanting to place business with me even though I haven’t done underwriting myself for the past six years – so they’re digging deep into their files.”

Other leading underwriting agencies contacted by insuranceNEWS.com.au have confirmed they also are receiving an unusual number of slips for risks they don’t usually get an opportunity to quote on.

Mr Lynam predicts brokers will find it much more difficult to obtain cover for hard-to-place risks in the June renewals season without facing steep premium rises in commercial lines.

Risks in cyclone-prone areas like North Queensland could also be more expensive.

“In circumstances where slips are being turned away by insurers, our first priority will be to look after brokers who have supported us over time,” Mr Lynam said.

JLT Australia CEO Leo Demer says his company hasn’t noted any dramatic change in the market.

“No one here has told me they’re having trouble placing business,“ he told insuranceNEWS.com.au. “But underwriters have been telling me for years it’s going to happen, so maybe they’ll be right this time.”

Reinsurance rates have been unusually low for the past five years, and commentators have predicted a “market-changing event” would be needed to force rates up.

Mr Lynam says the events in Australia and NZ, compounded by the Japanese earthquake, tsunami and nuclear catastrophes, “have finished the soft market”.

“You can see [insurers’] underwriters going through a change of mindset.”