Insurance Updates

In this update, we share practical insurance insights from the quarter that’s been, and forecasts for the quarter ahead.



Q2 saw a continuation of the hard market which has dominated the past 3 years. Over the December quarter, we saw two distinct approaches to underwriting from overseas/global insurers. The first; a more conservative and selective approach to risk acceptance, especially for new business. The second; a largely ‘business as usual’ play by local insurers who continued to balance growing their books with managing a risk-distributed portfolio. The behaviour of global insurers was largely driven by management reporting, end of year close out, and annual reinsurance treaty negotiations as underwriters looked to limit additional exposure to their portfolios.

In December, insurers again exceeded their top line premium targets as well as deploying their full calendar year capacity. This resulted in greater focus on risk selection, with even tighter terms and conditions applied to policies. Additionally, underwriters were required to obtain referral/management approval prior to the release of terms.  This caused delays, which in many cases resulted in a declinature for terms to be offered.



2021 marks the fourth consecutive year of hard market conditions, albeit with some anticipated softening on underwriters’ pricing for low hazard, vanilla style risks. At the upper end of the rating spectrum, we will continue to see higher rate increases for more hazardous risks, resulting in broader pricing. Well performing businesses are likely to receive higher single figure increases compared to distressed accounts (claims, occupancy, and exposure to natural catastrophe perils), which continue to attract rate increases in excess of 25%.

Despite underwriters continuing to approach natural catastrophes and highly volatile risks with caution, market capacity is set to remain stable for the quarter ahead.



As Insurers introduce new underwriting guidelines for the calendar year, we will see:

  • withdrawal of certain product classes (such as Professional Indemnity and Excess Liability)
  • introduction of sub-limits for hail and windstorms (previously not sub-limited)
  • complete exclusion for Infectious Disease
  • reduction of % participation, especially where risks are written on a 100% basis.

Insurers are taking these steps in an effort to maintain underlying profitability, especially in response to poor investment returns courtesy of low interest rates. 2021 results are expected to be mixed, contingent on product class and State/Territory frameworks. This will be reflected in upcoming market and regulatory reporting.

The recent Business Interruption test case in NSW in respect to COVID-19 will remain front of mind for insurers, with several undertaking capital raising to bolster balance sheets should Insurer appeals be unsuccessful.    


We’re With You All The Way

Feel free to reach out to discuss your risk exposures.


Travis Wendt

National Head of Corporate Insurance & Risk Solutions 



Read the FY21 Q2-Q3 Financial Lines Market Update


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