Global Insurance Market Index saw both global and Pacific pricings peak in the fourth quarter of 2020
The general outlook for insurance buyers in Australia is more positive for the second half of 2021, according a report from Marsh. It follows an 17 consecutive quarters of rate increases experienced in the Pacific insurance market.
“As market capacity stabilises, we expect the trend of premium increase moderations established in the first half of the year to continue into the remainder of 2021,” said John Donnelly, head of Global Placement, Marsh Asia Pacific.
“Overall, the general mood in the Australian insurance market is positive. The first half of 2021 saw improved insurer results compared to the prior year, which largely attributed to the increasing premium rates imposed in recent years.
“If this profit trend continues through the rest of the year, we expect market competition to increase, resulting in a better purchasing environment and outcomes for insurance buyers.”
The Global Insurance Market Index (based on quarterly data published by Marsh) saw both global and Pacific pricings peak in the fourth quarter of 2020.
For property insurance and directors and officers liability (D&O) insurance, premiums continued to increase throughout the first half of 2021, but at a lower rate. There are some signs of competition returning for loss-free quality property accounts.
“Marsh’s ongoing advocacy for changes to continuous disclosure laws that had played a role in driving class actions and D&O insurance prices in recent years finally saw a permanent change to continuous disclosure obligations passed through parliament in early August, 2021,” added Donnelly.
“This is a significant and positive development, which we hope will have a profound impact in the D&O space in reducing claims activity, reducing pricing and improving the availability of coverage in general.”
“The casualty market continues to face challenging conditions, experiencing the largest premium increases since 2012 with capacity tightening for certain high hazard industries/ exposures.”
Meanwhile, the cyber insurance market remains “in a state of flux”.
“A number of high profile claims has seen insurers refining their underwriting strategy and increasing premiums significantly,” said Donnelly.