If you purchase professional indemnity, management liability, directors and officers (D&O) or crime insurances to help protect your business from financial and professional liability – whether it’s because of an error or omission, or a professional breach of duty – this insurance market update is for you.
Check out our video with Marsh professional lines expert Chris Budge, who shares key highlights on the Australian FINPRO insurance market, including:
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, property 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, market conditions for the Australian financial and professional lines (FINPRO) insurance continued to improve in the first half of the year – especially for D&O buyers and businesses who have managed inflation well and are financially stable. But some challenges continue for professional indemnity insurance buyers, depending on the profession they’re in and the associated risks.
Let’s take a closer look.
Scroll down to download the full report.
Conditions within the Australian financial and professional lines insurance market continued to improve in 2023, particularly for insureds with a good financial position and a clear pathway through the current inflationary environment.
Directors & officers liability insurance: The Australian D&O market saw a much welcomed reprieve in 2022 following years of significant pricing increases and reduced insurer appetite. Key drivers for this market shift were subdued claims activity and insurers’ focus on growth. Average D&O premiums reduced by 10-25% in the first half 2023. Some ASX listed clients are starting to replenish their Side C cover, after years of reducing cover due to cost and availability. Despite generally favourable buying conditions, insurers continue to scrutinise heavily on ESG, solvency, inflation and supply chain disruption.
Professional indemnity insurance: The PI insurance market’s experience has been varied. Challenging risks and professions such as design and construct, engineering, financial planning and some financial institution risks continue to be scrutinised by insurers at renewal. Outside of these, premiums generally moderated in the first half of 2023, increasing on average by 0-10%.
Crime insurance: The crime insurance market remained relatively stable. Claims activity was largely due to social engineering frauds, for which most crime policies provide only limited cover. Large traditional crime losses have been relatively rare. Premiums increased by 0-15% in the first half of 2023.
Medical malpractice insurance: Capacity and policy coverage remained stable in the medical malpractice market for most healthcare risks across the registered health professional and allied healthcare sectors. Pricing continued to moderate, and increased 0-5% on average in the first half of 2023. Risks with complex presentation exposures such as hospitals, obstetrics and reproductive health, experienced higher premium increases of 10% or more. COVID-19 has increased claims in the general practitioner sector, while social inflation is putting pressure on premiums across the healthcare sector.
Improving renewal outcomes: To take advantage of favourable market conditions, clients may wish to consider replenishing policy limits, exploring alternatives or entering long-term agreements where offered, particularly in the D&O market. Starting your renewal strategy early is key, allowing adequate time for your broker to negotiate and achieve the best possible outcome for you.
Download report: For more FINPRO market insights or other insurance classes, please download our full report.
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