If you know a thing or two about personal or business insurance, or you’ve engaged in conversation with someone who does – you might have heard one thing – that it’s a seller’s market right now.
This can also be classified as a hard market, but what does it all mean and what is the likely impact on your own business?
Want to know what a harder insurance market has to do with your business?
Find out what you need to know with the Gold Coast insurance broker team at Crest Insurance below.
What is commonly found in a harder insurance market
When interest rates are low, such as right now, insurers experience tighter margins. Thus, they look to raising premiums as one way to keep viable.
When it comes to a harder insurance market, the following usually becomes reality:
- Fewer insurers will be available
- Policies on offer will see more exclusions and narrower policy wording – making it more difficult to claim
- Premiums will rise significantly
- Underwriting criteria will become stricter as the insurer’s appetite retracts
- With less competition between insurers, the market forces won’t act as a normal ‘handbrake’ to the rising premiums.
The contributing factors
There’s a cause and effect relationship that works to create a harder insurance market.
As Australia operates in a global marketplace, these are the current contributing factors:
- Economic downturn or at the very least, uncertainty
- Global events such as the current worldwide pandemic and undeniable climate change
- More claims due to catastrophic events
- Reduced insurance capital coupled with less competition
- Volatility in the financial markets.
What causes premiums to rise and policy conditions to tighten are increased catastrophic events such as bushfires, floods, pandemics, and if they’ve experienced a succession of losses in the courts.
For example, the number of average securities class actions lodged in Australia rose by 300% since 2011.
What your business can do to weather the storm
Fortunately, there are a number of strategies that individual businesses can and are encouraged to do in a hard insurance market.
What are they?
- Review your current insurance policies now instead of waiting for your renewal date
- Revamp and update your integrated risk management procedures and protocols
- Start collecting and preparing relevant data and evidence about your risk exposures and profile (and do so well before your renewal date)
- Seek assistance from a well-informed Gold Coast personal and business insurance broker.
It’s so important to not source personal or business insurance on your own in a hard insurance market. Insurance brokers know firsthand the insurers requirements in respect of risk management and the insurance markets to approach for different businesses and industries.
We can help you review your coverage and advise on reducing your exposures and risk profile.
Our options include consolidating all of your business insurance policies into one bill, so you can pay monthly instead of annually.
Looking for a Gold Coast insurance broker?
Look no further than Crest Insurance. Contact us today for streamlined business insurance, personal insurance and more, where we work hard to source the most suitable loan or coverage for your needs.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.