Supply shortages and significant weather events drive up claims inflation rate leading to underwriter risk aversion

Business Insurance Market Conditions and Risk Dynamics H2 2023

View Report

The Australian business insurance claims market is witnessing unprecedented challenges with major claims events and supply shortages extending claims resolution timeframes. There are a number of reasons for this: from the longer term impact of the COVID-19 pandemic creating heightened uncertainty regarding the scope of business interruption coverage, through to higher claims cost and the harder market cycle.

However, innovations in data leveraging and reengineering are bringing optimism, with new ways to reduce future business disruption and downtime impacts.

In our Business Insurance Market Conditions and Risk Dynamics H2 2023 report, we evaluate what is influencing claims outcomes, insights include:

  • Underwriters are increasingly deferring decision making on more challenging claims, and seeking advice from specialist third-party claims assessors.
  • Businesses need to take extra care to ensure assets are correctly valued to avoid claims settlement issues.
  • A more sophisticated application of data is helping to minimise business disruption when a claim is undergoing review, improving resolution timelines.
  • ASIC is clamping down on ESG corporate statements, regulatory requirements has led to fines amidst claims of greenwashing, and D&O claims may occur.

Other topics in the report include:

  • 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
  • Property — increased rates and variable capacity are becoming the new norm
  • 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

view report

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.

Gallagher publications may contain links to non-Gallagher websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by Gallagher, as we have no responsibility for information referenced in material owned and controlled by other parties. Gallagher strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.

Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312

MORE NEWS & INSIGHTS