Rising capacity will drive lower rates: Aon
Insurance premiums in some Australian commercial markets may fall after an easing trend emerged last year, Aon says.
Reinsurance capital grew to a record $US500 billion ($490 billion) at the end of last year and rate reductions started to appear after flattening at the end of the second quarter, according to the broker’s first commercial insurance update for this year.
There will be diverging trends this year across product lines covered by commercial insurance markets, Aon says.
Insurers will seek rate gains from clients that have performed poorly from a claims perspective or are exposed to natural catastrophes, according to Chief Broking Officer James Baum.
“For insureds that sit outside these classifications, early signs are competition will continue to grow, which will be fuelled by an increase in underwriting capacity from a number of key markets, potentially resulting in more competitive rates,” he said.