Australian property pricing rose 1-10% in the first quarter as catastrophe concerns contributed to a two-tier market, while coverages were more restrictive, Aon says. 
 
“Non-catastrophe exposed, low hazard occupancies experienced a favourable market, where pricing reached alignment to technical pricing adequacy while high hazard or poorly risked-managed and claims affected risks experienced more challenging market conditions,” Aon says.  
 
“Line sizes were under review as insurers managed natural catastrophe aggregation and exposures across portfolios.” 
 
Capacity remained sufficient although tight for challenging risk types such as waste management, food and beverage, and coal as well as for some cat-exposed geographies. 
 
Flood definitions were expanded to incorporate pluvial flood, representing surface water versus escape from water course, it says, while looking ahead, insurers are expected to continue to impose modest rate increases and will deploy natural catastrophe aggregate conservatively. 
 
In casualty and liability challenges continued around sexual misconduct, bushfire liability, frequency exposed business, large worker-to-worker risks and mining, especially, thermal coal, and some coverage reductions were mandated. 
 
The directors’ and officers’ market transition that began last year continued and a further easing of market conditions is expected. 
 
“While the claims environment remained active, improved rate adequacy served to broaden insurer appetite which brought new capacity into the market, particularly from London insurers, and improved pricing outcomes for many insureds, especially on low attachment excess layers,” it says. 
 
Securities class action activity remains a concern and the legislative and claims environment is being closely monitored. 
 
Professional indemnity is another two-speed market, with preferred risks seeing more competition and flat renewals, while more challenging risks, especially those with poor loss experience, saw capacity constraints and significant rate increases with new program capacity priced disproportionately higher than existing capacity. 
 
Market conditions have remained moderate to challenging in automobile, amid rising claims costs and supply chain issues.