It’s official: commercial premiums are on the way up
Brokers have confirmed commercial insurance rates are rising significantly.
A survey released today by the National Insurance Brokers Association (NIBA) using information collected from the December renewals period shows the prolonged “soft” market is at an end. The NIBA survey finds 87% of respondents nominating commercial market hardness at between 4 and 7 out of 10, compared with 73% six months ago.
The last survey, in June, found 26% of brokers experiencing premium rises. This time around it was 54%.
But there’s still plenty of competition about, with 37% saying they experienced no change and 9% claiming decreases in premiums.
NIBA CEO Noel Pettersen says falling investment returns usually mark the beginning of a hardening market, and there are “several other factors prompting insurers to abandon the highly competitive approaches that kept premiums low”.
He says the significant number of weather-related claims over the past 18 months has impacted on insurers’ bottom lines, “as well as the global economic crisis and the capital availability issues that may eventually arise”.
But Mr Pettersen says the upswing in the cycle can’t be compared with the sharp rises insurance-buyers experienced in 2001. “We are seeing the beginning of a correction after five or six years of soft conditions,” he said.
Details of the market conditions survey are in today’s ANALYSIS.
A survey released today by the National Insurance Brokers Association (NIBA) using information collected from the December renewals period shows the prolonged “soft” market is at an end. The NIBA survey finds 87% of respondents nominating commercial market hardness at between 4 and 7 out of 10, compared with 73% six months ago.
The last survey, in June, found 26% of brokers experiencing premium rises. This time around it was 54%.
But there’s still plenty of competition about, with 37% saying they experienced no change and 9% claiming decreases in premiums.
NIBA CEO Noel Pettersen says falling investment returns usually mark the beginning of a hardening market, and there are “several other factors prompting insurers to abandon the highly competitive approaches that kept premiums low”.
He says the significant number of weather-related claims over the past 18 months has impacted on insurers’ bottom lines, “as well as the global economic crisis and the capital availability issues that may eventually arise”.
But Mr Pettersen says the upswing in the cycle can’t be compared with the sharp rises insurance-buyers experienced in 2001. “We are seeing the beginning of a correction after five or six years of soft conditions,” he said.
Details of the market conditions survey are in today’s ANALYSIS.