The amount of Australian corporate business being placed on the London market could see the local insurance market’s influence reduced even further, according to some industry leaders.

“It’s no good seeing so much good business going out of the country,” one senior insurance industry executive said. “It’s not all hard-to-place business going out – some of it is prime business that might never return to the Australian market.”

For some Australian brokers, the amount of business placed on the Lloyd’s market through underwriting agencies has been disquieting. “Right now the Australian underwriters are being very cautious, which is understandable in the circumstances of where the cycle is at,” one broker said. “But they better understand that business probably isn’t going to be easy to win back when they want to increase their market share.”

ARIMA President Bruce Ferguson said the move of so much commercial business offshore “could see the Australian insurance market reduced to a mere backwater”.

“For more complex lines, there will be no cover – or only very small amounts – available onshore. Global markets will write the majority of Australian risks.”