Risk consultants Aon and the Royal Bank of Scotland (RBS) research arm Equities predict recent catastrophic events in Australia won’t be enough to turn the soft commercial market cycle.

However, they say personal lines premiums will rise another 5-7%.

The Commercial Insurance Broker quarterly report says last year’s fourth quarter showed competition was still being driven by an abundance of available capacity. And despite the recent natural catastrophes, international insurers are still keen to commit more capital to the Australian market.

Aon states that insurers’ profitability is diminishing following the catastrophes, which could lead to changes in commercial rates.

“But ample capacity remains to temper any price hikes. However, recent claim events are still being assessed and plenty of uncertainty remains.”

Included in this uncertainty is whether higher reinsurance rates will be imposed in the first quarter.