Rates haven’t dropped during the June renewals period, but they are flattening out, say brokers. In an informal check with brokers around the country, Sunrise Exchange News has found little evidence of rates falling in the commercial classes. The brokers say that despite pressure being applied on the underwriters by the big brokers, rates have stayed at much the same levels as 2003, although there are signs of some mild rises and even some falls.

Joe Rosker, SRS Insurance Group’s Victorian Property Insurance Manager, says despite market expectations renewals for 2004 have generally just been rolled over. He says underwriters were under more pressure to meet big budget targets than they were to keep intermediaries happy.

“Companies increasingly have to be more responsible and give decent returns to their shareholders and keep rates up,” he said. “The larger players like Aon and Marsh have put a fair bit of pressure on underwriters to get rate reductions for June.”

Mr Rosker says the property insurance sector was “not affected as much as other classes such as motor, where there have been heavy reductions”.

One regional-based NSW broker says the hardness of the market across commercial classes has “dropped significantly”, but many underwriters are “taking advantage of the smaller market and selecting policies according to their group appeal rather than their individual merits”.

Estimating a 10-30% increase across commercial premiums, he says the underwriters “have forgotten what insurance – and being an insurer – is all about”.

Another broker said commercial classes like public liability, professional indemnity, and directors’ and officers’ all experienced small increases, but other classes like property and business interruption fell.

Going against the industry’s general consensus, a Melbourne-based broker says the market has actually hardened in 2004, experiencing rate increases of 10-30% across all commercial and domestic classes. “Anything out of the ordinary they still just don’t want to know about,” he said.