Hard pricing conditions are easing as capacity returns and the entry of new players heats up competition, Bellrock Broking says in a market update. 

The broker says the insurance cycle is exhibiting characteristics of “1 o’clock”, meaning capital is flowing into the market. 

“Our view is that this is being driven particularly by new market entrants and capacity,” the July update says. 

“There is more competition which overall – on a product-by-product basis – has yielded reductions in pricing for many policyholders. 

“However, some product classes and industries are still receiving rate increases. Overall, market conditions are better for insureds.” 

Many hurdles stand in the way of an “expedited” return to soft market conditions, including catastrophic weather events, claims inflation, labour costs and insolvencies. 

The update also touched on Catholic Church Insurance (CCI) and what its run-off will mean for the broader market. 

Bellrock says coverage offered by CCI must be accommodated in the direct commercial insurance market. 

“Insurers have concerns about capital allocation, and this may impact property rates,” the update says.  

“We suspect that most capacity for general liability will come from offshore, given the limited coverage the local market can offer.” 

Here is the update’s assessment of the following classes: 

Property 

Rate trending varies. Low hazard occupancies have steady rates; high hazard, risk exposed assets are subject to uplifts of up to 30-40%. Most insurers have broadened their flood definitions and continue to monitor natural catastrophe aggregate exposures. 

Strata 

The strata insurance market continues to harden with insurance premiums subject to sustained increases. Even where there has been no claims activity or increase to the sum insured, premium increases of around 10% are standard. Increases well above 10% can be expected where property is subject to increased risk of natural disaster or extreme weather events. 

Professional Indemnity 

As with the property market, professional indemnity has varying rate trends. “Miscellaneous professions” such as education, technology and property professionals are experiencing softer market conditions. 

Construction, financial services, legal and accounting professions are experiencing slight rate increases, of up to 10-15%. There are still “hard to place” professions, such as building certifiers, structural engineers, crypto/agro advisers/funds and development mortgage valuers that have limited access to insurance markets. 

Cyber liability 

Market conditions remain challenging. However, increased appetite has begun to curb pricing increases. Insurers are seeking detailed risk information and insureds with strong cyber risks controls are gaining access to greater coverage and capacity in the market.