Capacity will continue to exceed demand in the Australian general insurance market this year, according to Marsh.

The broker’s Pacific Insurance Market Report warns global insurers are increasingly entering the local market and putting pressure on incumbents, but so far Australian-based insurers “have been able to maintain their market share”.

The landscape shifted last year due to new entrants and mergers, the report says, with the IAG and Wesfarmers Insurance merger now complete and Berkshire Hathaway Specialty Insurance (BHSI) licensed in April.

“[BHSI] has displayed a strong appetite for multiple lines of insurance and is pleased with its success to date. The XL Catlin merged entity has also demonstrated demand for cross-class opportunities.

“As we move into [this year], Ace’s acquisition of Chubb may also create a shift in the market’s dynamics. The merged entity will rebrand as Chubb globally and it has expressed a strong desire to maintain the pre-merger portfolios of both Ace and Chubb.”

A number of other players, including Axa and Lloyd’s, have increased their presence in the Australian market.

Axis bucked the trend and exited last year, but this “won’t have a substantial effect”.

“It is anticipated present market conditions will remain in place [this year], with capacity still exceeding the market’s demand,” the report says.

“This should result in competition in most classes of risk leading to favourable terms for clients.”

There were a number of substantial property losses last year, which affected some major insurers’ loss ratios.

Bushfire liability remains under scrutiny, with insurers “reluctant to commit to this risk”.

In terms of emerging risks, insureds are starting to explore first-party cyber cover more fully, plus pandemic risk.

New Zealand attracted a number of new entrants last year, including BHSI, FM Global, Ando and Ironshore. “Overall, the [New Zealand] market is vibrant and active, creating positive conditions for clients,” the report says.