If you purchase public or products liability insurance to help protect yourself and your business from third-party claims made against you for personal injury or damage to property – whether someone injures themselves on your premises or as a result of a defective product you provide – this liability insurance market update is for you.
Check out our video with Marsh casualty insurance expert Simon Gaunt, who shares key highlights on the Australian liability (casualty) insurance market, including:
- Premium impacts
- Coverage and underwriting trends
- Some challenging areas
- Tips on how you can achieve the best renewal results
This insurance market update is part of a bigger report that we publish once a year, which covers a wide range of insurance types including liability, financial and professional lines of insurance and much more – if you’re interested in reading the full Australian Mid-Year Insurance Market Update for 2023, you can download it after the video and transcript.
Generally speaking, the Australian liability insurance market continued to face challenging conditions in the first half of 2023. This was primarily because the cost of settling claims was higher (ie claims inflation) and liability insurers having to pay more for their reinsurance costs. More positively, insurers are still competing for new business, which is good news for insurance buyers.
Let’s take a closer look.
Scroll down to download the full report.
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Transcript
The Australian liability insurance market continues to face challenging conditions in 2023, with profitability and claims inflation driving market uncertainty.
Premium impacts: In the first half of this year, we saw liability premium increases between 5-15%. In some cases, competition through the introduction of new capacity and restructuring programs has helped to moderate these increases.
Key coverage and underwriting trends: ESG considerations remain a key element of the underwriting process, and insureds must continue to demonstrate a clear strategy in this space. Some insurers have reduced their capacity or restricted coverage in certain industries as a results of their own ESG journey and commitments. Further, per- and polyfluoroalkyl substances (known as PFAS) are also coming under increased scrutiny.
Challenging areas: Power and utilities (particularly bushfire and dam exposures), US exposures, rail, concussion in sport and abuse cover in ecclesiastical sectors are some of the areas that continue to be impacted by challenging market conditions. For particularly challenging industries and risks, insureds are buying higher limits in an effort to ‘future-proof’ their insurance programs.
Improving renewal outcomes: We expect premium increases to continue into the year as insurers attempt to protect profitability from claims inflation. More positively, new capacity and appetite for growth are expected to generate more competition in the market. Insureds who can demonstrate maturing ESG frameworks will be viewed more favourably by insurers. Those with challenging risks will need to demonstrate proactive risk identification and management to help insurers become comfortable during the underwriting process.
Download report: For more liability market insights or other insurance classes, please download our full report.
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This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances.
Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.
Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.
For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements (PDSs) available from the relevant product issuer. Target Market Determinations (TMDs) are available here.
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