There have been no rapid cost savings in rates during the June renewals season, says QBE Australia MD Raymond Jones. But not all insurers are holding the line, with one major insurer engaging in pricing that Mr Jones sees as irresponsible.

He and other insurers say increased market competition has helped to stabilise prices across most classes.

Mr Jones told Sunrise Exchange News the industry is experiencing more price competition than normal, but there has been no “systematic attack on the rating structure that has been built over the past two years”.

He says although most companies were commercially sound in their pricing strategies, an overseas competitor of QBE’s was “irresponsible on some large property risks pricing them below actuarially assessed minimum premiums”.

Anthony Day, Zurich’s GM General Insurance, says the market is experiencing far more competition in 2004 than in the recent past. This has led to an evening out of rates across most classes rather than reductions in premiums.

A National Insurance Brokers Association survey of brokers’ experiences in the June renewals is still being compiled at present, but early results tend to support Mr Day’s assessment of a softening in the motor vehicle and property classes, especially with clients who developed active risk management plans. He says larger end corporate clients experienced more reductions than small to medium businesses because of increased capacity.  “We saw some good reductions with larger clients who had very good risk management across the board.”

Mr Day says most brokers were reasonable in what they expected from insurers this June. “In general, most brokers wanted to see a stable market rather than one with continual peaks and troughs.”

He believes the industry will experience a flatter cycle with fewer peaks and troughs in the future. “It wouldn’t be a good move for the industry to go back to the days of extreme highs and lows.”

Overall, he says Zurich has had a profitable June with excellent retention rates. “This renewals season has been very positive and it seems our loyalty to clients has really paid off,” he said. “The results have been better than we expected.”