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22 July 2019
Australian property market capacity is contracting, while premiums are increasing for catastrophe-exposed and undesirable risks, Willis Towers Watson’s July update says.
“High exposed accounts are needing larger deductibles and a sound risk management strategy to attract capacity,” the report says.
Premiums are up 10-20% for catastrophe exposed risks, at least 15% for those considered undesirable or loss affected while other areas are seeing gains of up to 10%.
Willis Towers Watson says Australian insurers are putting underwriting submissions under increased scrutiny and seeking more granular data than in previous years.
Overall submission volumes have increased around two to three times prior years due to the premium and capacity moves, further straining insurers' resources and creating a congested market.
In general liability, primary rates are flat to up 10%, while stronger gains are reported for additional layers of risk.
“After years of depressed rates on excess liability, minimum premium levels have increased with finely priced layers seeing increases of up to 25%,” the report says.
Insurers have become more considered in deploying liability capacity, especially in cases where they have in the past been willing to take on higher levels of risk.