Business Insurance Price Rises Showing Signs of Slowdown
Business Insurance Price Rises Showing Signs of Slowdown
8
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Rates across the majority of commercial lines are still experiencing increases, but the pace of the rise is starting to weaken, according to a recent webinar by actuarial firm Finity.
The firm suggests that higher rate increases will be more targeted where necessary, while the majority of risks can expect more moderate rate adjustments in the upcoming financial year FY24.
Despite this slowdown, financial lines stand out as an exception, with prices projected to remain stagnant or even decline. This trend has continued over the past six months and marks a departure from the previous years of ever-increasing rates. Finity attributes this shift to increased competition in directors’ and officers’ insurance, which has even led to rate reductions and signals a transition from a hard market cycle to a soft market cycle.
The recent Finity webinar concludes the release of Optima, the firm's annual report on the state of the general insurance industry, ongoing challenges, and emerging trends. Commercial lines' gross written premium (GWP) experienced double-digit growth for the fifth consecutive year in FY23, bringing the estimated GWP pool to over $27 billion-nearly double what it was in FY17.
Factors Driving Increased GWP
Finity attributes the significant increase in GWP to strong rate increases during the hard market phase, as well as the influx of capacity from overseas in certain segments. This increased competition has not only provided market players with more options but has also supported overall top-line growth. However, signs indicate that the hardening market is tapering off.
The Finity webinar also highlighted the impact of technology transformation on distribution trends within the insurance industry. The shift towards digital platforms has created new opportunities for efficiency and value, although at a higher cost. Maintaining or expanding profitability remains a crucial consideration for industry participants. Additionally, technology has enabled brokers to enhance their services by delivering better knowledge and insights to clients, making it a key enabler for the broker channel.
Published:Tuesday, 5th Dec 2023 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
In a strategic move to bolster its customer support offerings, Isuzu Australia Limited (IAL) has announced the establishment of Isuzu Financial Services Australia (IFSA). This initiative marks the first time the Isuzu Group has founded a leasing company outside Japan, reflecting a significant commitment to the Australian market. - read more
Chinese automotive giant Geely Auto has announced its entry into the Australian light commercial vehicle market through its Farizon brand, specialising in electric commercial vehicles. This move signifies a notable expansion of electric vehicle (EV) offerings in Australia's commercial sector. - read more
The Clean Energy Finance Corporation (CEFC) has partnered with Volvo Group to introduce a $70 million financing package aimed at accelerating the adoption of heavy-duty battery electric trucks (HD BEVs) in Australia. This initiative seeks to address the substantial transport-related emissions by facilitating the transition to cleaner vehicle technologies. - read more
In today’s economy, a good credit score is more than just a number—it's a pivotal element of financial health that can open doors to necessary funding when it's most needed. Whether it's for purchasing a new home, investing in a business, or obtaining personal loans, a robust credit score in Australia is your ticket to favorable interest rates and loan terms. - read more
When you're on the journey to owning your dream home, securing the right home loan is as critical as choosing the perfect location. The benefits of using online home loan calculators can't be overstated, as they wield the power to illuminate the murky depths of mortgage rates, terms, and payments with surprising precision. - read more
In the dynamic world of Australian finance, securing a loan can be a pivotal move for individuals seeking to achieve their financial goals. Whether it's for purchasing a dream home, expanding a business, or simply consolidating debt, the importance of smart loan comparison cannot be overstated. With an array of lending products available, borrowers are often faced with a bewildering choice. That's why equipping yourself with powerful loan comparison strategies is not just important, it's essential. - read more
Knowledgebase
Amortization: The process of gradually paying off a debt over a period of time through regular payments.
