Marsh Australia says insurers are finding it difficult to secure premium increases for most classes of insurance despite pressure on underwriting margins and balance sheets.

The giant broker puts the situation down largely to excess capacity in Australia for property and public liability insurance.

This contrasts with directors’ and officers’ liability, where claims activity and increased exposures, mainly due to the global financial crisis, have lifted premiums by 10% on average.

In its latest client briefing, Marsh says renewals in April, May and early June suggest the market could remain stable into the September quarter.

“Conditions may deteriorate for clients toward the end of the year as insurers gauge their progress against year-end results and see a more compelling need for blanket premium increases,” the report said.

In property insurance, small-to-medium businesses have seen minor rate increases but most large corporate clients have avoided this due to healthy competition in the marketplace.

Professional indemnity rates are rising for certain industries like financial planning and stockbroking, which are likely to see more claims during an economic downturn, but generally conditions have stayed relatively stable.

“The revitalised risk appetite of certain insurers in the liability market has created competition for preferred business, resulting in premium reductions in the first quarter for a small percentage of clients, while the majority of businesses renewed with flat terms and conditions,” Marsh said.

Also see ANALYSIS.