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.
Recent data indicates a notable increase in mortgage refinancing across Australia, driven by borrowers seeking improved loan terms in response to escalating arrears, particularly among substantial loans. This trend underscores the financial pressures many Australians are currently facing. - read more
Australia's private debt market has experienced significant growth, with assets under management reaching A$224 billion-a 9% increase from the previous year. This milestone reflects a consistent shift in capital deployment within the Australian lending market, signaling a new chapter of innovation and flexibility. - read more
The Australian Securities and Investments Commission (ASIC) has announced a thorough review of the debt management and credit repair sector, aiming to assess compliance with legal requirements and enhance consumer protection, particularly for individuals facing financial difficulties. - read more
Having a robust credit profile is one of the most critical factors for financial health, especially when seeking loans in Australia. Whether you're eyeing a new car, dreaming of a home or simply want to secure a personal loan for unexpected expenses, your credit score often dictates the outcome. Not only does it influence a lender's decision to offer you finance, but it also affects the interest rates you might be charged. - read more
Debt consolidation is a strategy often utilized by individuals seeking to take control of their financial health. At its core, debt consolidation involves combining multiple debts into a single, more manageable loan, typically with more favorable terms such as a lower interest rate or a longer repayment period. - read more
Welcome to the world of savvy home financing! Whether you’re a first-time homebuyer or seasoned investor, navigating the ocean of home loan options can be daunting. In this digital era, one tool stands out for its effectiveness in simplifying this journey: the online home loan calculator. - read more
Knowledgebase
Monetary Policy: The actions of a central bank or other regulatory authority that determine the size and rate of growth of the money supply.
