The final few weeks of the June 30 renewals season have revealed the long soft market may be coming to an end, according to brokers.

Insurers have less appetite for risk and have tightened their terms or abandoned higher-risk companies with bad claims experience.

One broker told insuranceNEWS.com.au underwriters have been “far less inclined to negotiate” over some clients’ risks, and even profitable classes have seen rises in premiums.

But Insurance House MD and IBNA Chairman Gary Gribbin says the rises are not across the board and while the market is hardening after a prolonged soft period, it’s not yet a hard market.

“It’s extremely spotty,” he said. “There are legacy issues in ratings structures that are being corrected, and some high-risk businesses are being treated to some steep increases.

“There’s a fair bit of business out there that’s been underrated.”

He says examples are sawmills in Tasmania and Victoria. Businesses using expanded polystyrene have experienced rises of up to 50% in the June renewals.

“But I wouldn’t say it’s a sign of the market significantly hardening overall. Insurers are looking at 6-7% increases on a whole-of-account basis.”

A senior broker told insuranceNEWS.com.au there have been instances in the past month where “underwriters have put their rate on the table and walked away when the broker argued”.

He says industrial special risks premiums have risen as much as 25%, and management liability rates are up 20-25%. Rises in other liability classes have been moderate.

“Anyone who didn’t settle early in the period has been hit pretty hard,” the senior broker said. “Some brokers who wouldn’t accept increases have come back once they’ve tested the market and have accepted.”

He says the renewals period has been a challenge for many younger brokers who have not previously experienced a hardening market.

“It’s been 10 years of a soft market, and this time around [insurers] have been asking for more detail of risks, and any client with a high claims record has been hit with increases.

“A lot of [young brokers] haven’t experienced that.”

He says local brokers who know their clients’ businesses well have had an advantage at the renewals period, “because they know the risks”.

Mr Gribbin agrees this renewals period has been a test for brokers, but “those who have prepared well have done well. They’re already planning for the September renewals period, because it’s likely we’ll see some additional hardening.”

He says low interest rates and bond earnings have affected insurers’ bottom lines, “but the market is still awash with capital that has to be utilised”.