Upward pressure in premium prices is continuing and the hard market cycle remains, although with some easing, Gallagher says in a second-half report for Australia. 

“A two-speed market continues to be characterised by a challenging property underwriting environment and, in contrast, general improvements for cyber insurance where premium increases have started to level off as more capacity becomes available,” Gallagher says. 

For industries with higher exposure to risk, including waste recycling, hazardous materials and commercial properties in areas prone to flooding and bushfires, the market remains tight and insurers are selectively underwriting risks that fit their appetite. 

There’s also a focus on neighbouring properties with higher risk occupations, such as flammable materials and waste recycling. 

The report notes that underwriters are increasingly deferring decision making on more challenging claims, and seeking advice from specialist, third-party assessors. 

“This raises challenges where decision makers and legal teams located outside of Australia may struggle to grasp the nuances of the local market, leading to rigid decision making,” it says. 

In the directors’ and officers’ market rates have stabilised and, in many cases, reduced, although not to the lower levels seen five years ago. 

Competition is increasing amongst insurers, with a mixture of incumbents and new entrants vying for territory, the report says. 

Regulatory risks present challenges for companies purchasing D&O cover, with a focus on cyber resilience, anti-money laundering compliance, environmental, social and governance (ESG) and greenwashing. 

Premium stabilisation and increased capacity has also been seen in cyber and Gallagher says the increasingly mature market is recognising businesses that follow best cyber security practices. 

Government regulation is now sharply focused on Australia’s cyber security risks and need for comprehensive risk mitigation controls, emphasising cyber awareness education, deeper understanding of risks and insurance implications, the report says.