Increased rates and variable capacity are becoming the new norm

Business Insurance Market Conditions and Risk Dynamics H2 2023

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The property market continues to feel the impact of high inflation, following year-on-year premium increases since 2020, due to a more challenging risk placement climate. Sourcing suitable levels of commercial property insurance cover and an insurer accepting the risk may be problematic, as a growing number of declines are being seen at this time.

There is a heightened interest in commercial premises occupancy and its nature of use, determining the scope of the risks to be assessed. Additionally, there have been a number of recent cases where renewal terms factor in the neighbouring properties and/or the land space surrounding the insured property, assessing for bushfire or grassfire risk.

In our Business Insurance Market Conditions and Risk Dynamics H2 2023 report, we outline how these risks are influencing the property insurance market, insights include:

  • Renewal premiums remain high as inflationary pressures continue to impact the sector.
  • A greater number of property risks are being declined than previously, with increased rates applied.
  • A rising volume of natural catastrophe and extreme weather related claims have led to market pricing adjustments and reduced capacity.
  • Property insurance business interruption indemnity periods should be reviewed for rebuilding or property reinstatement.

Other topics in the report:

  • Claims — supply shortages and significant weather events drive up claims inflation rate
  • D&O — negotiable premiums provide a more favourable market for companies seeking D&O
  • Cyber — risk awareness takes centre stage as breach response resilience is prioritised
  • Workplace risks — regulators consider tightening measures as the trend towards workers' long-term claims rises
  • Marine & cargo — regulatory scrutiny of business ESG credentials to increase
  • Energy & renewables — insurer appetite is growing in a period of transition

For more insights on the state of the business insurance market in Australia and risk dynamics, download our full report.

Looking for business risk and insurance advice?

During this time of change you can turn to our Gallagher experts for advice and guidance. We are here for you and will do everything we can to help you face the future with confidence.

Please access your copy of the Business Insurance Market Conditions and Risk Dynamics H2 2023.

Business Insurance Market Conditions and Risk Dynamics H2 2023

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Disclaimer

Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.

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