Insurers yet to walk the talk on rates
Insurers are under increasing pressure to apply across-the-board increases in premiums, but a new report says they’re struggling to make it happen.
The report by Aon Australia analyses first-quarter renewal data in conjunction with RBS Equities Australia.
It says the Australian market “is now in an adjustment phase of the pricing cycle. Insurers are seeking rate increases across most classes, although on the whole these have yet to materialise.”
Premium rates for directors’ and officers’, property, general and product liability remained fairly stable in the first quarter, the report says.
Some pressure on workers’ compensation premiums has been experienced, while a surge in trade credit claims inflated many premiums by about 25%. The professional indemnity market has been “inconsistent”.
Across the Tasman it’s a different story. The Aon report says generally flat premiums in Australia do not reflect the NZ market, where rates have begun to “harden noticeably”.
Brokers contacted by insuranceNEWS.com.au concur with the Aon findings. Canberra’s Mutual Brokers account manager Dean Brown says rates are generally stable.
“We’re not seeing broadbrush increases,” he said. “Insurers are more strategic now and have better information than they did in years gone by. Rather than implementing across-the-board rises they are more likely to look at individual classes.
“If it’s a good risk in a lower hazard industry then we’re not seeing changes in premiums. But insurers have changed their attitudes toward some higher-risk categories.”
WA broker Peter Riley of Graham S Knight & Associates says most rates are stable, with commercial motor and workers’ compensation the exceptions.
“In motor we are seeing increases of around 12% while workers’ compensation would be in the order of 10-12%,” he told insuranceNEWS.com.au.
The Aon report says pressure on premiums will continue throughout the rest of the year as insurers grapple with lower returns.
The report by Aon Australia analyses first-quarter renewal data in conjunction with RBS Equities Australia.
It says the Australian market “is now in an adjustment phase of the pricing cycle. Insurers are seeking rate increases across most classes, although on the whole these have yet to materialise.”
Premium rates for directors’ and officers’, property, general and product liability remained fairly stable in the first quarter, the report says.
Some pressure on workers’ compensation premiums has been experienced, while a surge in trade credit claims inflated many premiums by about 25%. The professional indemnity market has been “inconsistent”.
Across the Tasman it’s a different story. The Aon report says generally flat premiums in Australia do not reflect the NZ market, where rates have begun to “harden noticeably”.
Brokers contacted by insuranceNEWS.com.au concur with the Aon findings. Canberra’s Mutual Brokers account manager Dean Brown says rates are generally stable.
“We’re not seeing broadbrush increases,” he said. “Insurers are more strategic now and have better information than they did in years gone by. Rather than implementing across-the-board rises they are more likely to look at individual classes.
“If it’s a good risk in a lower hazard industry then we’re not seeing changes in premiums. But insurers have changed their attitudes toward some higher-risk categories.”
WA broker Peter Riley of Graham S Knight & Associates says most rates are stable, with commercial motor and workers’ compensation the exceptions.
“In motor we are seeing increases of around 12% while workers’ compensation would be in the order of 10-12%,” he told insuranceNEWS.com.au.
The Aon report says pressure on premiums will continue throughout the rest of the year as insurers grapple with lower returns.