Significant underwriting capacity continues to flow into the Australian market, fuelling competition between insurers which is driving pricing downwards, Bellrock Advisory says in a market update.

Many policyholders benefited from premium reductions at the end of the financial year, CEO Marc Chiarella says, with those demonstrating risk mitigation efforts taking greatest advantage. 

"With insurers competing to increase their top line, premium rates are reducing,” Bellrock says. “The trends are positive for policyholders and are likely to continue throughout the second half of 2024.”  

Some market conditions remain challenging, for example in professional indemnity for complex construction risk and financial services, complex property placements, construction liability and strata -- particularly plans with defects and claims frequency. 

Here is Bellrock’s take on the following classes:   

Property 

Increased insurer appetite, new market entrants, and local underwriting agencies mean premium rates are more stable, with low/moderate risks obtaining rollover or single digit premium increases. 

For assets exposed to natural perils, rates have slowed and increases of 10-15% can now be expected, though home and contents insurers are upping rates on domestic policies by 20-100% and underinsurance remains a significant business interruption claim risk. 

Commercial public and products liability 

Rates have stabilised with more options available. Policyholders with robust risk management can expect rollover rates up to 10%, while hard to place risks such as recycling and chemicals are still presenting challenges. 

Cyber 

Cyber liability premiums remain steady as insurers are keen to establish themselves and gain market share, leading to competitive pricing strategies, broader policy terms and services such as active network monitoring. Coverage benefits vary greatly across policy wordings, and privacy laws will prompt more stringent cyber risk requirements. 

Motor fleet 

Policyholders with poor claims performance history face rate increases as high as 30% as supply chain disruptions and surging repair costs pressure insurer pricing. Well performing fleets with vehicle numbers over 50 “remain extremely competitive”.

Contractors Plant & Equipment 

There is ample capacity and broad coverage, though equipment such as cranes and machinery used underground command higher rates.  

Construction 

Bellrock is observing improvement in market conditions, with capacity increasing and a heightened appetite for renewals. Premium rates have become more stable, with reductions secured for attractive risks. Insurers are seeking shared project risk placements rather than assuming full liability, creating longer negotiation periods to secure consistent coverage.  

Construction liability 

Global insurers are setting up operations here and rate hikes are expected to ease.   

Travel 

For standard corporate travel policies, rollover rates can be expected. For travel policies containing significant leisure-related trips, increases of 10-15% are being applied. 

Directors' and officers'

D&O management liability rates continue to reduce, with savings of up to 30% available on expiring premiums, helped by Lloyd’s of London participation, though Bellrock warns about restrictive benefits of cover offered by new entrants.  

Information technology 

There is limited insurer interest for fintech businesses operating in higher risk sectors such as credit card lenders, unsecured personal loans, short-term business credit and startup business funding. 

See the full market update here.