Over Q1, we saw Insurers continuing to correct rating structures for products that have historically been competitively priced, especially landlords, mid-market home insurance, farm, and motor insurances. 

Insurers are taking a more conservative approach to risks, following the unprecedented volume of claims after the flood, storm, and fire events over the past few years. We have witnessed several insurers such as Vero and IAL withdraw their domestic product offering entirely as a result. In turn, this is impacting the availability and affordability of coverage.

QLD and parts of NSW and VIC are seeing a shortage of tradespersons, which has contributed to the cost of claims and further increases to insurance premiums.

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Risk management is an essential part of keeping insurance claims and premiums to a minimum. As the warmer months approach, this can include clearing land around your property and ensuring trees and shrubs in the immediate vicinity are maintained to reduce combustion risk during fire season. Clients may consider absorbing smaller losses/claims to make their individual claims history more appealing to insurers and choose to reserve insurance policies for larger losses.

When purchasing property in certain high-risk geographies (e.g., fire or flood zones), we encourage clients to speak with their insurance broker to understand the specific property exposures and related insurance premiums prior to completing the purchase. In some instances, properties located in North Queensland may cost tens of thousands more to insure in the current market compared to prior years.

We also encourage consultation with your insurance broker prior to the purchase of high-value vehicles. Depending on the vehicle, insurers may impose non-negotiable conditions on cover, including clean driving history, off-street secure garaging, GPS vehicle tracking, and the exclusion of drivers under 30 years of age. Insurers are more likely to decline claims or withdraw cover due to non-disclosure, so be sure to inform your broker about any change in circumstances.

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We expect insurers will continue to monitor claims risk factors such as floods and fires in high-risk geographies and apply rate corrections appropriate to the level of risk. Domestic property insurances will continue to attract premium increases until labour and material costs and availability stabilise.