Insurance Market Update – What To Expect In 2021
Events in 2020 changed the risk landscape in unprecedented ways. Amid the COVID-19 pandemic, Bush Fires, Floods, Climate Change issues, Class Action claims and a recession forced many organisations to manage the effects of these and other challenges.
The insurance industry, meanwhile, struggled to keep up with emerging risks and rising claims costs, with balance sheet pressures compounded by record low interest rates, heightened regulatory oversight and competition from other sources of risk financing.
It is clear that 2021 will continue to be a challenging time for the insurance industry and you as insurance buyers. We expect:
- Additional hardening in major insurance rates, especially those with COVID-19-related exposures such as Directors’ and Officers’ Liability (D&O), Professional Indemnity, Property and Business Interruption risks.
- Accelerated use of alternative risk financing solutions such as Captives, Parametric and other Portfolio solutions.
- Increased pressure on insurance buyers to improve enterprise resilience in a framework that includes meaningful environmental, social and governance compliance and effective business continuity management.
- Further consolidation of global insurers and brokers reducing competition in the local market.
- Reduced insurer capacity and appetite on perceived high- risk classes.
- Insurers will require far more detailed underwriting submissions and risk management data than ever before to enable them to offer terms.
- Brokers will be expected to work harder for their fees and provide additional services in relation to their client’s risk exposures such as natural catastrophe modelling, risk tolerance analysis, business interruption reviews, risk profiling and gap analysis, cyber risk assessments and alternative risk financing solutions to provide options in the lead up to renewal, rather than more of the same at higher premiums and deductibles.
Procurement Australia is ideally placed to assist you in navigating the hardening and rapidly changing insurance market to ensure you have a bespoke program at the most competitive terms available from the most appropriate global providers in the lead up to your 2021 renewal.
Our insurance specialists have acted for over 250 entities over the last 10 years providing independent, impartial, and objective advice.
Blog Submission: Peter Sellwood
PALTD InsureRight – Insurance & Risk Management
Contact us today to speak to our insurance specialists or If you would like a no-obligation proposal or require further details on the range of services we provide, please contact Peter at psellwood@paltd.com or call him on 0418 299 225.
We would be happy to provide you with references from satisfied clients.
