If your business has commercial property insurance to help protect your physical assets – from real estate and buildings, to equipment and inventory – this property insurance market update is for you.
Check out our video with Marsh commercial property insurance expert Jamie Coughlan, who shares key highlights on the Australian property insurance market, including:
- Premium impacts
- Coverage and underwriting trends
- Some challenging areas
- Tips on how you can achieve the best renewal results
This insurance market update is part of a bigger report that we publish once a year, which covers a wide range of insurance types including liability, financial and professional lines of insurance and much more – if you’re interested in reading the full Australian Mid-Year Insurance Market Update for 2023, you can download it after the video and transcript.
Generally speaking, the Australian property insurance market is competitive and premium increases have slowed down. However, this has not been the case for everyone, such as businesses and industries with more complex or challenging risks.
Let’s take a closer look.
Scroll down to download the full report.
Transcript
The start of 2023 saw insurers go through challenging property reinsurance treaty renewals, with significant reinsurance cost increases ranging from 25-50%. Consequently, insurers are looking to recoup some of this increase through higher premiums.
Premium impacts: On average, property insurance pricing in the region rose 8% in the first quarter and 5% in the second quarter. The moderation of premium increases were attributable to increased capacity and competition, and a relatively low natural catastrophe loss experience in Australia. Ongoing inflation has also impacted premiums.
Challenging areas: Challenging market conditions and higher premiums are still experienced by insureds in the rail sector, loss-impacted insureds or those with high CAT, US or New Zealand exposures.
Key coverage and underwriting trends: Insurers are seeking validation through independent reviews as they continue to scrutinise the adequacy of material damage and business interruption declared values. Insureds themselves are also applying more rigour in their own valuation process. Rather than applying an inflationary loading across all values, insureds are reviewing assets individually to limit premium increases to critical assets only.
Improving renewal outcomes: As profitability and capacity begin to return in the Australian property insurance market, we expect further easing of premium increases and more consistent coverage terms for the rest of the year. To be best positioned to achieve favourable renewal outcomes, it’s important for insureds to demonstrate risk quality, a proactive approach to reducing risk and associated capital spend, and lessons learnt following a loss.
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