In Partnership with
PI insurance at
the crossroads
Players are keen for a definitive turnaround in market fortunes, but inconsistency and cross-signals mean many are just dipping their toes rather than diving in
Arné Booysen
Allied World
Industry experts
Christian Garling
FTA Insurance
Ben Robinson
Honan Insurance Group
Andy Wass
JMD Ross Insurance Brokers
Arné Booysen has more than 17 years' experience in the insurance industry. He recently joined Allied World in Australia, where he is responsible for the company's national professional indemnity portfolio. Part of his role is to develop new primary products and expand Allied World’s professional indemnity offerings and geographical footprint. Booysen’s experience also extends to directors and officers liability, information technology and cyber insurance.
Allied World
Arné Booysen
FTA Insurance director Christian Garling has worked in the insurance industry for over 25 years. He was the founder of the Australian operations of a and New York Stock Exchange-listed company. Subsequently, he founded FTA, a Lloyd’s coverholder. Garling has successfully run insurance operations in the Australian market for over 15 years and is well known for providing exceptional service and support to brokers. He always has a ‘can do’ attitude when working collaboratively with brokers and helping to win business.
FTA Insurance
Christian Garling
Ben Robinson has 10 years' experience as a specialist financial lines broker and extensive knowledge of optimal design and placement of specialty professional lines product and programs. Robinson has worked with clients across an array of industry segments, such as technology, government, financial institutions and professional service organisations. He has strong market relationships and is passionate about educating C-suites on the importance of cyber risks and directors and officers liability markets. Robinson holds a Bachelor of Business degree and a Diploma of Financial Services (Insurance Broking) and is a Senior Associate of ANZIIF.
Honan Insurance Group
Ben Robinson
Professional indemnity specialist Andy Wass has been advising consulting engineers and architects globally since 2000. He holds a BA (Accounting), and a Diploma in Insurance (CII UK) and is an ANZIIF Senior Associate CIP. Wass joined Griffiths & Armour in Liverpool, UK, in 2000 and moved to Australia in 2005 to establish its Sydney branch, which became JMD Ross Professional Risks. Wass has significant experience in advising clients in Australia and the UK on professional indemnity, including placement of cover, claims handling, and risk management advice. He regularly runs PI seminars and
in-house training for colleagues.
JMD Ross Insurance Brokers
Andy Wass
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec.
Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Vault Plus Mortgage and Finance Consultancy
David Merison
“I think we’ve seen a number of years of hardening of the market, which has definitely been needed”
Christian Garling,
FTA Insurance
FLICKERS of blue sky can mean a lot of things during a storm, ranging from nothing at all to the first signs of abatement.
The professional indemnity market in Australia has been buffeted over the last few years, and many are waiting for a break in the weather. But key players in the sector at a recent Executive Insights panel on Insurance Business TV suggested it was still too early to judge with confidence what lies ahead.
The sector is a patchwork of different microclimates with their own dynamics, and while some areas may be showing possible signs of improvement, the question is whether any green shoots will wither as the economy threatens to undermine business confidence.
Areas that are showing signs of life include directors and officers liability insurance and the Lloyd’s of London insurance market. On the other hand, construction and financial sector professional indemnity insurance and the cyber liability insurance sector more broadly still face headwinds, with business likely to remain subdued.
“Are we going to see further increases [in average premiums], or are we going to start to plateau?”
Arné Booysen, Allied World Assurance
The Australian insurance market is seeing a slight increase in rates in line with a bit more turnover depending on the type of risk. Then there are other parts of the local market where much higher rates have also been needed to improve bottom lines.
“It was a soft market for so long, we've actually reached sort of maybe the correct to the level of premiums that make it a bit more sustainable, make it a bit more profitable,” said Wass.
“That's the big question this year – are we really at the right level?”
“All parties often get involved with these claims – the builder, the project managers, the engineers,” Booysen said. “In my experience, claims can take quite a long time to settle; and costs – there are a lot of costs factored into it; and then the other factor is you can actually get cross-claims from the multiple parties involved in the contract.”
Recent regulation in the construction sector designed to weed out shoddy practices has also led to an increase in claims over the short term. This dynamic is deterring insurers from re-entering the market until all these claims play out.
Insurance for the finance sector is also continuing to suffer losses due to claims in the area.
“Financial institutions, fund managers, financial planners, life insurance brokers, even mortgage and finance brokers – those areas have also had a number of issues,” said Garling.
“Insurers are still pulled back a lot from those areas.”
The final report of the royal commission into misconduct in the industry, released in 2019, and the lack of progress in implementing its recommendations had a major impact on business deriving from the sector, he said.
“[It] really scared a lot of insurers away from that area and made them very reticent to go back into it."
Key performance stats – professional indemnity,
end Dec 2021
Wass predicted things would get worse before they got better.
“We may need a bit more hardening first,” he said.
Honan Insurance Group placement manager for professional and executive risks Ben Robinson felt the same, saying the data suggested there was still some way to go before the market achieved correction.
“The PI market still faces its challenges,” he said. “There are certainly areas that are performing, and there are certainly other areas that aren't performing, which is creating that hardened marketplace still.”
While no one is predicting a drop in average premiums, there is a feeling that the sector is in a better position to lay the foundations for recovery than it was a few years ago.
“Where some insurers have been heavily weighted to some of the more onerous sectors of the industry professions, we're starting to see more targets around miscellaneous business, and more stringent underwriting,” said Robinson.
He added that D&O liability had also shown more signs of stability over the last quarter.
“We're really optimistic this will improve for insurance buyers in 2022,” Robinson said.
Market cross-currents
Other areas of the market continue to face headwinds.
Construction is one such area, according to Booysen. He said there were a number of scenarios in the sector that typically involved multiple parties when a claim came through; examples included cladding, structural defects or waterproofing issues.
Average written premium for professional indemnity by underwriting year
3,620
2008
“I think we've seen a number of years of hardening of the market, which has definitely been needed,” said FTA Insurance director Christian Garling.
The Lloyd’s market is a case in point.
“[This] is definitely going through significant hardening … if your risks are going into Lloyd’s, you will see significant increases in premium and tightening of terms,” he said.
But this is a sign of a market getting its house in order. Loss ratios were as high as 90% several years ago, making the business unsustainable.
“The syndicates in Lloyd’s had to decide which business to let go and which business to keep,” said Garling.
The benefits of this strategy are starting to be felt now as the pandemic slowly recedes. Lloyd’s made a profit in FY21 after a loss in FY20, and company representatives have been able to travel to Australia for the first time in two years – a sign of increased appetite.
Insurance broker Andy Wass at JMD Ross Insurance Brokers said he had recently been able to secure contract liability extensions with a Lloyd’s underwriter recently, something that had not happened for a while.
Even so, he stressed that it was early days, and these examples were still isolated signs of any thaw.
“We've got one, maybe two underwriters sharing some keenness, but we’ll take it slowly."
All eyes on APRA
Industry data paint a telling tale of the last few years.
Allied World assistant vice president underwriting manager Arné Booysen said the PI market was very broad and complex.
While it was hard to corral the many sectors it covered into one meaningful snapshot, he noted that the average written premiums for professional indemnity showed a steady increase from around the $2,000 mark in 2016 up to nearly $3,000 in 2020, the latest year for which data is currently available on the APRA National Claims and Policy Database.
Booysen said he felt all eyes were on the APRA data release for 2021 due in late July, because premiums would be at heights not seen since the GFC if they continued their current upwards trend.
The question is, “are we going to see further increases, or are we going to start to plateau?” he said.
Read on
Another worry for the future is whether clients will be able to swallow more premium increases in the current uncertain environment.
“We've been delivering pretty decent premium and rating increases to insureds the last two, three years … and we are hitting them again this year,” said Wass.
He said some companies were “doing it tough”, and PI was not going to get any cheaper over the next six to 18 months.
Leaner and meaner
Despite the difficult environment, insurers have battened down the hatches where they can and are running a tighter ship than in the past.
“They've pulled back to their core portfolio and moved away from the areas that were giving them losses,” said Garling.
Another positive development is the fact that insurers have reduced limits.
“Instead of offering a $20m limit, they're offering a $10m limit, or instead of a $10m limit, they're offering a $5m limit,” he said.
“I think it's a really good strategy for insureds that might have a higher exposure to bring in a small primary layer.”
Customers are also helping buoy the market.
“In my experience," Booysen said, "insureds themselves have also become more concerned about risk and whether it can be managed properly." This suggests a stronger appetite for insurance, even with the economic uncertainty.
He said he had seen people refusing to sign contracts because the liability provisions were either unlimited or too onerous, and insureds who were withdrawing from certain activities due to the risk involved.
“Insureds are becoming a lot more risk adverse,” Booysen said.
Allied World Assurance Company Holdings, through its subsidiaries, is a global provider of insurance and reinsurance solutions. It operates under the brand Allied World and has supported clients, cedents and trading partners with thoughtful service and meaningful coverages since 2001. It is a subsidiary of Fairfax Financial Holdings and benefits from a worldwide network of affiliated entities that allows it to think and respond in
non-traditional ways. Allied World has a strong capital base, with solutions that anticipate rather than react to changing trends, and its teams are focused on establishing long-term relationships that are mutually beneficial.
Find out more
FTA Insurance, a Sydney-based underwriter and Lloyd’s coverholder, provides fast turnaround on all quotes, with guaranteed better cover and sharper pricing. FTA provides a broad underwriting appetite on all of its products, including professional indemnity – with an optional combined PI and GL wording available, design and construct, information technology liability, management liability and associations liability. FTA targets hired labour providers, IT companies and contractors, business consultants and D&C companies, and partners with top-shelf security firm Chubb, AIG and Berkshire Hathaway via their Lloyd’s platforms. FTA’s expertise and positive culture are significant contributors to its reputation.
Find out more
“I think we’ve seen a number of years of hardening of the market, which has definitely been needed”
Christian Garling,
FTA Insurance
“Are we going to see further increases [in average premiums], or are we going to start to plateau?”
Arné Booysen,
Allied World Assurance
In Partnership with
PI insurance at the crossroads
Players are keen for a definitive turnaround in market fortunes, but inconsistency and cross-signals mean many are just dipping their toes rather than diving in
Read on
Andy Wass
JMD Ross Insurance Brokers
Ben Robinson
Honan Insurance Group
Christian Garling
FTA Insurance
Arné Booysen
Allied World
Industry experts
FLICKERS OF blue sky can mean a lot of things during a storm, ranging from nothing at all to the first signs of abatement.
The professional indemnity market in Australia has been buffeted over the last few years, and many are waiting for a break in the weather. But key players in the sector at a recent Executive Insights panel on Insurance Business TV suggested it was still too early to judge with confidence what lies ahead.
The sector is a patchwork of different microclimates with their own dynamics, and while some areas may be showing possible signs of improvement, the question is whether any green shoots will wither as the economy threatens to undermine business confidence.
“The syndicates in Lloyd’s had to decide which business to let go and which business to keep,” said Garling.
The benefits of this strategy are starting to be felt now as the pandemic slowly recedes. Lloyd’s made a profit in FY21 after a loss in FY20, and company representatives have been able to travel to Australia for the first time in two years – a sign of increased appetite.
Insurance broker Andy Wass at JMD Ross Insurance Brokers said he had recently been able to secure contract liability extensions with a Lloyd’s underwriter recently, something that had not happened for a while.
Even so, he stressed that it was early days, and these examples were still isolated signs of any thaw.
“We've got one, maybe two underwriters sharing some keenness, but we’ll take it slowly."
The Australian insurance market is seeing a slight increase in rates in line with a bit more turnover depending on the type of risk. Then there are other parts of the local market where much higher rates have also been needed to improve bottom lines.
Areas that are showing signs of life include directors and officers liability insurance and the Lloyd’s of London insurance market. On the other hand, construction and financial sector professional indemnity insurance and the cyber liability insurance sector more broadly still face headwinds, with business likely to remain subdued.
“I think we've seen a number of years of hardening of the market, which has definitely been needed,” said FTA Insurance director Christian Garling.
The Lloyd’s market is a case in point.
“[This] is definitely going through significant hardening … if your risks are going into Lloyd’s, you will see significant increases in premium and tightening of terms,” he said.
But this is a sign of a market getting its house in order. Loss ratios were as high as 90% several years ago, making the business unsustainable.
“It was a soft market for so long, we've actually reached sort of maybe the correct to the level of premiums that make it a bit more sustainable, make it a bit more profitable,” said Wass.
“That's the big question this year – are we really at the right level?”
All eyes on APRA
Industry data paint a telling tale of the last few years.
Allied World assistant vice president underwriting manager Arné Booysen said the PI market was very broad and complex.
While it was hard to corral the many sectors it covered into one meaningful snapshot, he noted that the average written premiums for professional indemnity showed a steady increase from around the $2,000 mark in 2016 up to nearly $3,000 in 2020, the latest year for which data is currently available on the APRA National Claims and Policy Database.
Booysen said he felt all eyes were on the APRA data release for 2021 due in late July, because premiums would be at heights not seen since the GFC if they continued their current upwards trend.
The question is, “are we going to see further increases, or are we going to start to plateau?” he said.
Wass predicted things would get worse before they got better.
“We may need a bit more hardening first,” he said.
Honan Insurance Group placement manager for professional and executive risks Ben Robinson felt the same, saying the data suggested there was still some way to go before the market achieved correction.
“The PI market still faces its challenges,” he said. “There are certainly areas that are performing, and there are certainly other areas that aren't performing, which is creating that hardened marketplace still.”
While no one is predicting a drop in average premiums, there is a feeling that the sector is in a better position to lay the foundations for recovery than it was a few years ago.
“Where some insurers have been heavily weighted to some of the more onerous sectors of the industry professions, we're starting to see more targets around miscellaneous business, and more stringent underwriting,” said Robinson.
He added that D&O liability had also shown more signs of stability over the last quarter.
“We're really optimistic this will improve for insurance buyers in 2022,” Robinson said.
Market cross-currents
Other areas of the market continue to face headwinds.
Construction is one such area, according to Booysen. He said there were a number of scenarios in the sector that typically involved multiple parties when a claim came through; examples included cladding, structural defects or waterproofing issues.
“All parties often get involved with these claims – the builder, the project managers, the engineers,” Booysen said. “In my experience, claims can take quite a long time to settle; and costs – there are a lot of costs factored into it; and then the other factor is you can actually get cross-claims from the multiple parties involved in the contract.”
Recent regulation in the construction sector designed to weed out shoddy practices has also led to an increase in claims over the short term. This dynamic is deterring insurers from re-entering the market until all these claims play out.
Insurance for the finance sector is also continuing to suffer losses due to claims in the area.
“Financial institutions, fund managers, financial planners, life insurance brokers, even mortgage and finance brokers – those areas have also had a number of issues,” said Garling.
“Insurers are still pulled back a lot from those areas.”
The final report of the royal commission into misconduct in the industry, released in 2019, and the lack of progress in implementing its recommendations had a major impact on business deriving from the sector, he said.
“[It] really scared a lot of insurers away from that area and made them very reticent to go back into it."
Another worry for the future is whether clients will be able to swallow more premium increases in the current uncertain environment.
“We've been delivering pretty decent premium and rating increases to insureds the last two, three years … and we are hitting them again this year,” said Wass.
He said some companies were “doing it tough”, and PI was not going to get any cheaper over the next six to 18 months.
Leaner and meaner
Despite the difficult environment, insurers have battened down the hatches where they can and are running a tighter ship than in the past.
“They've pulled back to their core portfolio and moved away from the areas that were giving them losses,” said Garling.
Another positive development is the fact that insurers have reduced limits.
“Instead of offering a $20m limit, they're offering a $10m limit, or instead of a $10m limit, they're offering a $5m limit,” he said.
“I think it's a really good strategy for insureds that might have a higher exposure to bring in a small primary layer.”
Customers are also helping buoy the market.
“In my experience," Booysen said, "insureds themselves have also become more concerned about risk and whether it can be managed properly." This suggests a stronger appetite for insurance, even with the economic uncertainty.
He said he had seen people refusing to sign contracts because the liability provisions were either unlimited or too onerous, and insureds who were withdrawing from certain activities due to the risk involved.
“Insureds are becoming a lot more risk adverse,” Booysen said.
Allied World Assurance Company Holdings, through its subsidiaries, is a global provider of insurance and reinsurance solutions. It operates under the brand Allied World and has supported clients, cedents and trading partners with thoughtful service and meaningful coverages since 2001. It is a subsidiary of Fairfax Financial Holdings and benefits from a worldwide network of affiliated entities that allows it to think and respond in non-traditional ways. Allied World has a strong capital base, with solutions that anticipate rather than react to changing trends, and its teams are focused on establishing long-term relationships that are mutually beneficial.
Find out more
FTA Insurance, a Sydney-based underwriter and Lloyd’s coverholder, provides fast turnaround on all quotes, with guaranteed better cover and sharper pricing. FTA provides a broad underwriting appetite on all of its products, including professional indemnity – with an optional combined PI and GL wording available, design and construct, information technology liability, management liability and associations liability. FTA targets hired labour providers, IT companies and contractors, business consultants and D&C companies, and partners with top-shelf security firm Chubb, AIG and Berkshire Hathaway via their Lloyd’s platforms. FTA’s expertise and positive culture are significant contributors to its reputation.
Find out more
Arné Booysen has more than 17 years' experience in the insurance industry. He recently joined Allied World in Australia, where he is responsible for the company's national professional indemnity portfolio. Part of his role is to develop new primary products and expand Allied World’s professional indemnity offerings and geographical footprint. Booysen’s experience also extends to directors and officers liability, information technology and cyber insurance.
Allied World
Arné Booysen
FTA Insurance director Christian Garling has worked in the insurance industry for over 25 years. He was the founder of the Australian operations of a New York Stock Exchange-listed company. Subsequently, he founded FTA, a Lloyd’s coverholder. Garling has successfully run insurance operations in the Australian market for over 15 years and is well known for providing exceptional service and support to brokers. He always has a ‘can do’ attitude when working collaboratively with brokers and helping to win business.
FTA Insurance
Christian Garling
Ben Robinson has 10 years' experience as a specialist financial lines broker and extensive knowledge of optimal design and placement of specialty professional lines product and programs. Robinson has worked with clients across an array of industry segments, such as technology, government, financial institutions and professional service organisations. He has strong market relationships and is passionate about educating C-suites on the importance of cyber risks and directors and officers liability markets. Robinson holds a Bachelor of Business degree and a Diploma of Financial Services (Insurance Broking) and is a Senior Associate of ANZIIF.
Honan Insurance Group
Ben Robinson
Professional indemnity specialist Andy Wass has been advising consulting engineers and architects globally since 2000. He holds a BA (Accounting), and a Diploma in Insurance (CII UK) and is an ANZIIF Senior Associate CIP. Wass joined Griffiths & Armour in Liverpool, UK, in 2000 and moved to Australia in 2005 to establish its Sydney branch, which became JMD Ross Professional Risks. Wass has significant experience in advising clients in Australia and the UK on professional indemnity, including placement of cover, claims handling, and risk management advice. He regularly runs PI seminars and in-house training for colleagues.
JMD Ross Insurance Brokers
Andy Wass
“I think we’ve seen a number of years of hardening of the market, which has definitely been needed”
Christian Garling,
FTA Insurance
“Are we going to see further increases [in average premiums], or are we going to start to plateau?”
Arné Booysen,
Allied World Assurance
In Partnership with
PI insurance at the crossroads
Players are keen for a definitive turnaround in market fortunes, but inconsistency and cross-signals mean many are just dipping their toes rather than diving in
Read on
Andy Wass
JMD Ross Insurance Brokers
Ben Robinson
Honan Insurance Group
Christian Garling
FTA Insurance
Arné Booysen
Allied World
Industry experts
FLICKERS OF blue sky can mean a lot of things during a storm, ranging from nothing at all to the first signs of abatement.
The professional indemnity market in Australia has been buffeted over the last few years, and many are waiting for a break in the weather. But key players in the sector at a recent Executive Insights panel on Insurance Business TV suggested it was still too early to judge with confidence what lies ahead.
The sector is a patchwork of different microclimates with their own dynamics, and while some areas may be showing possible signs of improvement, the question is whether any green shoots will wither as the economy threatens to undermine business confidence.
Areas that are showing signs of life include directors and officers liability insurance and the Lloyd’s of London insurance market. On the other hand, construction and financial sector professional indemnity insurance and the cyber liability insurance sector more broadly still face headwinds, with business likely to remain subdued.
“I think we've seen a number of years of hardening of the market, which has definitely been needed,” said FTA Insurance director Christian Garling.
The Lloyd’s market is a case in point.
“[This] is definitely going through significant hardening … if your risks are going into Lloyd’s, you will see significant increases in premium and tightening of terms,” he said.
But this is a sign of a market getting its house in order. Loss ratios were as high as 90% several years ago, making the business unsustainable.
“The syndicates in Lloyd’s had to decide which business to let go and which business to keep,” said Garling.
The benefits of this strategy are starting to be felt now as the pandemic slowly recedes. Lloyd’s made a profit in FY21 after a loss in FY20, and company representatives have been able to travel to Australia for the first time in two years – a sign of increased appetite.
Insurance broker Andy Wass at JMD Ross Insurance Brokers said he had recently been able to secure contract liability extensions with a Lloyd’s underwriter recently, something that had not happened for a while.
Even so, he stressed that it was early days, and these examples were still isolated signs of any thaw.
“We've got one, maybe two underwriters sharing some keenness, but we’ll take it slowly."
The Australian insurance market is seeing a slight increase in rates in line with a bit more turnover depending on the type of risk.
Then there are other parts of the local market where much higher rates have also been needed to improve bottom lines.
“It was a soft market for so long, we've actually reached sort of maybe the correct to the level of premiums that make it a bit more sustainable, make it a bit more profitable,” said Wass.
“That's the big question this year – are we really at the right level?”
All eyes on APRA
Industry data paint a telling tale of the last few years.
Allied World assistant vice president underwriting manager Arné Booysen said the PI market was very broad and complex.
While it was hard to corral the many sectors it covered into one meaningful snapshot, he noted that the average written premiums for professional indemnity showed a steady increase from around the $2,000 mark in 2016 up to nearly $3,000 in 2020, the latest year for which data is currently available on the APRA National Claims and Policy Database.
Booysen said he felt all eyes were on the APRA data release for 2021 due in late July, because premiums would be at heights not seen since the GFC if they continued their current upwards trend.
The question is, “are we going to see further increases, or are we going to start to plateau?” he said.
Wass predicted things would get worse before they got better.
“We may need a bit more hardening first,” he said.
Honan Insurance Group placement manager for professional and executive risks Ben Robinson felt the same, saying the data suggested there was still some way to go before the market achieved correction.
“The PI market still faces its challenges,” he said. “There are certainly areas that are performing, and there are certainly other areas that aren't performing, which is creating that hardened marketplace still.”
While no one is predicting a drop in average premiums, there is a feeling that the sector is in a better position to lay the foundations for recovery than it was a few years ago.
“Where some insurers have been heavily weighted to some of the more onerous sectors of the industry professions, we're starting to see more targets around miscellaneous business, and more stringent underwriting,” said Robinson.
He added that D&O liability had also shown more signs of stability over the last quarter.
“We're really optimistic this will improve for insurance buyers in 2022,” Robinson said.
Market cross-currents
Other areas of the market continue to face headwinds.
Construction is one such area, according to Booysen. He said there were a number of scenarios in the sector that typically involved multiple parties when a claim came through; examples included cladding, structural defects or waterproofing issues.
“All parties often get involved with these claims – the builder, the project managers, the engineers,” Booysen said. “In my experience, claims can take quite a long time to settle; and costs – there are a lot of costs factored into it; and then the other factor is you can actually get cross-claims from the multiple parties involved in the contract.”
Recent regulation in the construction sector designed to weed out shoddy practices has also led to an increase in claims over the short term. This dynamic is deterring insurers from re-entering the market until all these claims play out.
Insurance for the finance sector is also continuing to suffer losses due to claims in the area.
“Financial institutions, fund managers, financial planners, life insurance brokers, even mortgage and finance brokers – those areas have also had a number of issues,” said Garling.
“Insurers are still pulled back a lot from those areas.”
The final report of the royal commission into misconduct in the industry, released in 2019, and the lack of progress in implementing its recommendations had a major impact on business deriving from the sector, he said.
Another positive development is the fact that insurers have reduced limits.
“Instead of offering a $20m limit, they're offering a $10m limit, or instead of a $10m limit, they're offering a $5m limit,” he said.
“I think it's a really good strategy for insureds that might have a higher exposure to bring in a small primary layer.”
Customers are also helping buoy the market.
“In my experience," Booysen said, "insureds themselves have also become more concerned about risk and whether it can be managed properly." This suggests a stronger appetite for insurance, even with the economic uncertainty.
He said he had seen people refusing to sign contracts because the liability provisions were either unlimited or too onerous, and insureds who were withdrawing from certain activities due to the risk involved.
“Insureds are becoming a lot more risk adverse,” Booysen said.
Allied World Assurance Company Holdings, through its subsidiaries, is a global provider of insurance and reinsurance solutions. It operates under the brand Allied World and has supported clients, cedents and trading partners with thoughtful service and meaningful coverages since 2001. It is a subsidiary of Fairfax Financial Holdings and benefits from a worldwide network of affiliated entities that allows it to think and respond in non-traditional ways. Allied World has a strong capital base, with solutions that anticipate rather than react to changing trends, and its teams are focused on establishing long-term relationships that are mutually beneficial.
Find out more
FTA Insurance, a Sydney-based underwriter and Lloyd’s coverholder, provides fast turnaround on all quotes, with guaranteed better cover and sharper pricing. FTA provides a broad underwriting appetite on all of its products, including professional indemnity – with an optional combined PI and GL wording available, design and construct, information technology liability, management liability and associations liability. FTA targets hired labour providers, IT companies and contractors, business consultants and D&C companies, and partners with top-shelf security firm Chubb, AIG and Berkshire Hathaway via their Lloyd’s platforms. FTA’s expertise and positive culture are significant contributors to its reputation.
Find out more
Professional indemnity specialist Andy Wass has been advising consulting engineers and architects globally since 2000. He holds a BA (Accounting), and a Diploma in Insurance (CII UK) and is an ANZIIF Senior Associate CIP. Wass joined Griffiths & Armour in Liverpool, UK, in 2000 and moved to Australia in 2005 to establish its Sydney branch, which became JMD Ross Professional Risks. Wass has significant experience in advising clients in Australia and the UK on professional indemnity, including placement of cover, claims handling, and risk management advice. He regularly runs PI seminars and in-house training for colleagues.
JMD Ross Insurance Brokers
Andy Wass
Ben Robinson has 10 years' experience as a specialist financial lines broker and extensive knowledge of optimal design and placement of specialty professional lines product and programs. Robinson has worked with clients across an array of industry segments, such as technology, government, financial institutions and professional service organisations. He has strong market relationships and is passionate about educating C-suites on the importance of cyber risks and directors and officers liability markets. Robinson holds a Bachelor of Business degree and a Diploma of Financial Services (Insurance Broking) and is a Senior Associate of ANZIIF.
Honan Insurance Group
Ben Robinson
FTA Insurance director Christian Garling has worked in the insurance industry for over 25 years. He was the founder of the Australian operations of a New York Stock Exchange-listed company. Subsequently, he founded FTA, a Lloyd’s coverholder. Garling has successfully run insurance operations in the Australian market for over 15 years and is well known for providing exceptional service and support to brokers. He always has a ‘can do’ attitude when working collaboratively with brokers and helping to win business.
FTA Insurance
Christian Garling
Arné Booysen has more than 17 years' experience in the insurance industry. He recently joined Allied World in Australia, where he is responsible for the company's national professional indemnity portfolio. Part of his role is to develop new primary products and expand Allied World’s professional indemnity offerings and geographical footprint. Booysen’s experience also extends to directors and officers liability, information technology and cyber insurance.
Allied World
Arné Booysen
Share
Share
Share
$1,000
$2,000
$3,000
$4,000
2009
3,152
2010
3,001
2011
2,788
2012
2,612
2013
2,549
2014
2,360
2015
2,170
2016
1,997
2017
2,257
2018
2,254
2019
2,549
2020
2,824
Average across all states
Underwriting year
Source: APRA National Claims and Policies Database overview, January 2003 to December 2020
Gross written premium
Year to end Dec 2020
$2.949bn
Year to end Dec 2021
$3.655bn
Change
+23.9%
Source: APRA National Claims and Policies Database overview, January 2002 to December 2021
Copyright © 2022 Key Media
Key Media
Insurance Business America
Insurance Business Canada
Wealth Professional Canada
People
Terms & conditions
Privacy policy
Conditions of use
About us
Contact us
RSS
Asia
NZ
AU
CA
US
UK
CONTACT US
SPECIALTY
BEST INSURANCE
RESOURCES
RISK MANAGEMENT
FEATURES
TV
NEWS
Year to end Dec 2020
$3.065bn
Year to end Dec 2021
$2.382bn
Change
-22.3%
Gross incurred claims
Year to end Dec 2020
113%
Year to end Dec 2021
70%
Change
-43 ppt
Gross loss
ratio
Year to end Dec 2020
102%
Year to end Dec 2021
76%
Change
-26 ppt
Net underwriting combined ratio
Copyright © 2022 Key Media
People
Terms & conditions
Privacy policy
Conditions of use
About us
Contact us
RSS
Asia
NZ
AU
CA
US
UK
contact us
specialty
Best Insurance
Resources
RISK MANAGEMENT
FEATURES
TV
News
“[It] really scared a lot of insurers away from that area and made them very reticent to go back into it."
Another worry for the future is whether clients will be able to swallow more premium increases in the current uncertain environment.
“We've been delivering pretty decent premium and rating increases to insureds the last two, three years … and we are hitting them again this year,” said Wass.
He said some companies were “doing it tough”, and PI was not going to get any cheaper over the next six to 18 months.
Leaner and meaner
Despite the difficult environment, insurers have battened down the hatches where they can and are running a tighter ship than in the past.
“They've pulled back to their core portfolio and moved away from the areas that were giving them losses,” said Garling.
Copyright © 2022 Key Media
People
Terms & conditions
Privacy policy
Conditions of use
About us
Contact us
RSS
Asia
NZ
AU
CA
US
UK
contact us
specialty
Best Insurance
Resources
RISK MANAGEMENT
FEATURES
TV
News