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