12 March 2020

Know what to expect in current insurance market conditions

Get the benefit of our brokers’ expert knowledge of how recent events are shaping the availability, cost and terms of insurance cover. We look at the factors influencing market trends, how to plan to meet them and leverage your relationship with your broker to achieve a positive outcome.

We’re in the midst of a transitioning insurance market. After a long run of broad availability and competition for market share, the market started moving from soft to harder conditions in 2017. That hardening cycle looks set to continue for another year to 18 months, depending on external factors.

2676 -Transitioning market guide - How the insurance market cycle works

 

Work with your broker

Under these conditions the role of your broker as a trusted advisor is critical to making you aware of and planning for these changing conditions. An insurance broker offers much more than a simple price comparison service. Using their understanding of your business’s capacity and needs, they scan the global insurance market for the cover that best serves your interests and transfers undue risk away from your balance sheet, and explore funding options to suit your resources.

Strategy

Their market knowledge means they have strategic understanding of where and when to make placements, which can translate as advantage for you. They can also advise on strengthening your risk management program to reduce your exposures.

Relationship broking

Your broker will most likely already have an established relationship with the insurer, and your business can benefit from the way that they can filter and ‘sell’ your risks on your behalf.

Providing information

An essential part of securing a positive outcome is the quality of your submitted documentation. Your broker can guide you through the process, the level of detail you should provide, formatting requirements and meeting deadlines.

Accurate assessment

Since insurers are examining the risks they accept more closely they may request a site visit. This can provide a number of advantages.

  • It strengthens the relationship with the insurer
  • It provides them information that you may not have thought to present
  • It gives them a more complete risk profile for your business
  • If you can show evidence of a robust risk management program it could reduce your premium

insurance hard market

 

Understand your position

Start the conversation with your broker early, months out from renewal time ideally. Ensure that you discuss any changes or developments in your operations – they will need to be included in the information the insurer assesses. Also take the potential impact of factors such as fires or extreme weather into account.

Be prepared for changes to pricing, deductibles and coverage, especially in relation to some classes of insurance such as commercial property.

Underwriters have withdrawn from some types of risks completely, particularly in flood or fire-prone areas. To forestall further losses they’re applying much more stringent scrutiny to the quality of renewal data and information provided, including claims history.

This is to be expected in hardening market conditions and discussions with your broker can help to anticipate and plan for them.

Read the guide in full

For more detail about the current transitioning market conditions download the complete guide.

 

Download the guide

 

Further reading

Why business insurances remain critical

https://blog.ajg.com.au/https/blog.ajg.com.au/business-risks-in-2020


To the extent that any material in this document may be considered advice, it does not take into account your objectives, needs or financial situation. You should consider whether the advice is appropriate for you and review any relevant Product Disclosure Statement and policy wording before taking out an insurance policy.