Brokers are already hard at work on the next round of policy renewals, and many say they are positive policyholders will benefit from some relief in commercial non-liability premiums. Liability classes, it appears, remain another story.

While the majority of the industry agrees liability rate increases will be “nowhere near as high” as they’ve been in the past few years, premiums won’t be dropping, either. And a quick poll by Sunrise Exchange News has revealed some differences of opinion on where the market is heading at present.  

Ben Goodall, GM of major Victorian regional broker Griffiths Goodall, says some “huge rate drops” in classes like heavy motor vehicle insurance have been experienced. But he doesn’t expect to see any decreases in liability cover.

“It will take years before the new reforms have any effect on liability rates,” he said. “While I don’t think the market will be seeing the huge increases of the past few years, we haven’t seen any softening as yet, either.”

Mr Goodall expects to see more insurers willing to expand their risk portfolios, which could be a problem for underwriting agencies. “I think some underwriting agencies might lose out because insurers are looking at higher-risk business that was previously only handled by the agencies.”

While he expects professional indemnity to remain a total mess, clients are being quite understanding. “People are expecting small, reasonable increases, but they’re not expecting reductions.”   

Director of NSW-based Exchange Insurance Brokers, Ian Parisi, says the market will experience a softening of about 10%, but he doesn’t expect “a total freefall”.

While the liability market continues to have difficulties, Mr Parisi believes there will be a softening in some liability classes. “Insurers have had a very good 12 months and they can sustain a drop.”

As for corporate client expectations, he says there’s a strong undercurrent of opinion that expects premiums to increase. “Customers are now more receptive to alternate risk transfer mechanisms.”

National Insurance Brokers Association CEO Noel Pettersen says he expects to see rates begin to plateau, and there won’t be more increases at an international reinsurance level. “Overall, capacity has been restored and there’ll be more of an upswing in the global economy.”

He says although brokers expect increases in liability classes, “the market will never see the sort of rate increases seen in the past five or six years. It’s more important that the focus is the availability of liability and not affordability.

“Liability has been a problem child for the last two or three years, but more than ever consumers understand the necessity of insurance,” Mr Pettersen said. “Without it planes can’t fly and buildings can’t open.”