Rate rises are slowing but insurers have not started “irrational pricing”, according to IAG MD Mike Wilkins.

“We are not seeing any significantly irrational behaviour,” he said during Friday’s half-year profit announcement.

IAG’s half-year results note the intermediated market remains competitive but “broadly rational, with capacity slowly reappearing in a number of segments”.

Mr Wilkins says he expects a strong full-year performance for IAG.

Suncorp Group CEO Patrick Snowball has also flagged an impact from softening markets, with strong capacity in the reinsurance market reducing the pressure of recent years when reinsurers raised rates to recoup disaster losses in Australia and New Zealand.

He told analysts at Suncorp’s results briefing that all business lines are growing, despite soft markets, and insurers have started the calendar year benefitting from higher investment yields and lower reinsurance costs.

Steadfast MD Robert Kelly told this morning’s results briefing he expects broking to enjoy a robust financial year, noting the SME sector served by Steadfast does not suffer the same volatility in pricing as other lines.

Mr Kelly says there is “huge competition” in the heavy commercial sector and in retail lines that experienced large price increases following the 2011 floods.

“There is extreme competition at the top end of town but we are not seeing that in the middle sector.”

He says a collapse in SME pricing would flow through to insurers’ profitability and they are unlikely to risk that damaging their share prices.

(see CORPORATE)