Commercial motor rates driven up as claim costs bite
Upward pressure on commercial motor premiums is continuing as insurers look to pass on surging claims costs.
Last month’s $300 million Brisbane storm capped an intense 18-month claims period, and Suncorp EGM of Intermediated Distribution Anthony Day says commercial motor insurance buyers can expect a “modest increase” in premiums to cover those exposures.
“We have seen an increased frequency and severity in weather-related claims that will be reflected in the pricing of premiums,” he told insuranceNEWS.com.au.
“We can expect to see up to a 10% increase on some short-tail policies, and in some short-tail classes we are already seeing increases in the vicinity of 10%.”
Mr Day says developments in the global insurance industry “create optimism that the bottom of the cycle is now upon us and more rational pricing behaviour will return”.
He’s not alone in his assessment. Zurich Australia National Underwriting Manager for Motor Tony Whitby told insuranceNEWS.com.au increasing labour and parts costs, especially in mining towns, have also driven up premiums.
“Some premiums have increased 5-10% for the general fleet market, but it depends on the client,” he said. “It is not a vanilla product.”
While severe weather has had a limited impact on Zurich’s mainly large commercial portfolio, Mr Whitby says the biggest impact is claims inflation.
Brokers are keeping clients abreast of developments, and Zurich National Broker Manager Keith Till says clients are unlikely to walk away from the business.
Mr Day agrees, saying strong retention rates at Suncorp “indicate that any rate increases are acceptable to brokers and their clients”.
Last month’s $300 million Brisbane storm capped an intense 18-month claims period, and Suncorp EGM of Intermediated Distribution Anthony Day says commercial motor insurance buyers can expect a “modest increase” in premiums to cover those exposures.
“We have seen an increased frequency and severity in weather-related claims that will be reflected in the pricing of premiums,” he told insuranceNEWS.com.au.
“We can expect to see up to a 10% increase on some short-tail policies, and in some short-tail classes we are already seeing increases in the vicinity of 10%.”
Mr Day says developments in the global insurance industry “create optimism that the bottom of the cycle is now upon us and more rational pricing behaviour will return”.
He’s not alone in his assessment. Zurich Australia National Underwriting Manager for Motor Tony Whitby told insuranceNEWS.com.au increasing labour and parts costs, especially in mining towns, have also driven up premiums.
“Some premiums have increased 5-10% for the general fleet market, but it depends on the client,” he said. “It is not a vanilla product.”
While severe weather has had a limited impact on Zurich’s mainly large commercial portfolio, Mr Whitby says the biggest impact is claims inflation.
Brokers are keeping clients abreast of developments, and Zurich National Broker Manager Keith Till says clients are unlikely to walk away from the business.
Mr Day agrees, saying strong retention rates at Suncorp “indicate that any rate increases are acceptable to brokers and their clients”.