Greater competition among insurers and their moves into new markets could lead to lower rates, according to JP Morgan insurance analyst Shane Fitzgerald. He told Sunrise Exchange News most insurers acknowledge premiums have peaked and are entering new markets in a bid to increase growth. This will eventually lead to softer rates.

“There’s an abundance of capital in the Australian market and underwriters know they can’t get any more,” he said. “They’re looking to other ways to expand, and an increase in competition has been the result.”

He says that while the industry will spend some time marketing and advertising products, a cut in premiums is likely to be the final result.

“There won’t be a sudden reduction in rates,” he said. “We’ll see an advertising blitz and it will take time for rates to reduce.”