Premiums: competition bites
The commercial insurance market is hardening, but it’s nothing like the savage rises of 2001/02, according to NIBA brokers.
Results from the June 30 renewals season show “gradual and uneven” rises in commercial lines, with personal lines showing more abrupt rises as insurers scramble to recoup claims losses.
NIBA CEO Noel Pettersen says most brokers put the hardness of the commercial insurance market at between 4 and 7 on a scale of 1 to 10. Last June most brokers said it was between 2 and 4.
But in personal lines, 72% put market hardness at between 5 and 7, with another 16% putting it at 8. Last June’s results showed premiums rising between 5 and 6.
Mr Pettersen told insuranceNEWS.com.au the June 30 results show there’s still plenty of life in the commercial market, with competition helping to hold premiums down.
Slightly more brokers reported falls in premiums (27%) than rises (26%). The battle for market share is still happening, with 18% of brokers saying insurers are continuing to cut rates to achieve market share. And where there were rises, 43% said they were “reasonable”.
“There’s evidence of some insurers being prepared to lose commercial business rather than compete for some risks that brokers consider quite reasonable,” Mr Pettersen said. “That’s not a worry at all, as long as there are other players in the market happy to take their place. And there’s still plenty of competitive activity out there.”
You’ll find more details on the survey in ANALYSIS.
Results from the June 30 renewals season show “gradual and uneven” rises in commercial lines, with personal lines showing more abrupt rises as insurers scramble to recoup claims losses.
NIBA CEO Noel Pettersen says most brokers put the hardness of the commercial insurance market at between 4 and 7 on a scale of 1 to 10. Last June most brokers said it was between 2 and 4.
But in personal lines, 72% put market hardness at between 5 and 7, with another 16% putting it at 8. Last June’s results showed premiums rising between 5 and 6.
Mr Pettersen told insuranceNEWS.com.au the June 30 results show there’s still plenty of life in the commercial market, with competition helping to hold premiums down.
Slightly more brokers reported falls in premiums (27%) than rises (26%). The battle for market share is still happening, with 18% of brokers saying insurers are continuing to cut rates to achieve market share. And where there were rises, 43% said they were “reasonable”.
“There’s evidence of some insurers being prepared to lose commercial business rather than compete for some risks that brokers consider quite reasonable,” Mr Pettersen said. “That’s not a worry at all, as long as there are other players in the market happy to take their place. And there’s still plenty of competitive activity out there.”
You’ll find more details on the survey in ANALYSIS.