Australian liability insurance market conditions improved considerably in the first half of 2024
All businesses may be susceptible to liability claims and, in some professions, it is mandatory to hold some form of liability insurance.
It’s vital your business is protected against legal costs if an incident were to occur – even if you are not at fault. From plumbers to personal trainers and from sole traders to contractors, we’ve got you covered. Helping you to get on with what you do best.
If you currently have or considering purchasing public or products liability insurance to help protect yourself and your business, this liability insurance market update is for you.
This liability insurance market update is part of a bigger report that we publish each year, which covers a wide range of insurance types including property, general liability, financial and professional liability, cyber and much more.
A closer look at recent liability insurance trends
Market conditions improved considerably for the Australian liability insurance market in the first half of 2024:
Insurance premiums stabilising: We saw liability rate increases much lower than the same time last year. Premiums increased on average between 0-2% in the first half of 2024.
Challenging areas: Although market conditions generally improved, some industries and risks still experienced challenges, such as:
- Rail, pharmaceutical, sports, faith and community
- Natural catastrophe, bushfire and US exposures
- Businesses with exposure to per- and polyfluoroalkyl substances (PFAS)
Check out our video below with Marsh liability insurance expert Simon Gaunt, who shares key highlights on the Australian liability insurance market.
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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