Australia: Premium prices continue to increase
Source: Asia Insurance Review | Dec 2019
Overall insurance pricing in the third quarter of 2019 in the Pacific region, of which Australia forms the largest market, increased nearly 19%, continuing a trend that began in 2015, says Marsh.
Pacific composite pricing was driven by increases in D&O rates, as well as increases in property rates, says the 3Q2019 Marsh Global Insurance Market Index.
Property insurance pricing increased 18% in the third quarter, the seventh consecutive quarter of year-over-year double-digit increases. Many risks in Australia and New Zealand (CAT or non-CAT), experienced increased pricing in the 10% to 20% range. Increases were observed across many industries (real estate, mining, and downstream energy) as a result of reduced capacity and appetite from major insurers.
Casualty pricing increased 6%, a trend that has continued for the last three years. Competition continued in the casualty market, although pricing increased at a fairly consistent rate compared to prior quarters. Financial and professional liability pricing rose 25% in the third quarter, marking nine straight quarters of double-digit increases. The largest increases were experienced in listed company D&O; it was not uncommon to see increases of 100%. Financial services professional indemnity (PI) experienced increases of a similar magnitude.
D&O market prices continued to be driven by securities claims. The claims environment has led to a number of insurers exiting the marketplace, with others taking firmer positions on price, capacity, and retentions. A large volume of Australian business is being placed into the London market, where similar firming is evident.
Globally, on average, pricing for property risks increased by 10%; financial and professional lines rose by nearly 14%; and casualty increased by 1%. A