Insurance News: Businesses hit by ‘insurance stress’ as market hardens
Australian businesses are increasingly suffering “insurance stress” caused by price spikes, reduced coverage or an inability to secure insurance at all, a new survey has found.
The Ai Group poll, released today, asked member companies what insurance problems they are encountering.
More than half of the 100 respondents – mostly medium-sized businesses – reported “unusual trouble” seeking insurance in the past 12 months. High premium growth was the most frequently reported problem.
“A concerning number of businesses are reporting that there is a general lack of insurance options,” Ai Group CEO Innes Willox said.
“Because of this, some businesses reported paying an extremely high price, or not obtaining insurance at all.
“One business reported a more than three-fold premium increase with the excess going from $100,000 to $250,000 and the premium from $224,000 to $757,000.”
Mr Willox warns that COVID-19 could further exacerbate the situation, with impacts still playing out across workplaces and communities.
In addition to the poll, Ai Group researched the causes of the hardening market and found “a number of local and global factors driving higher premiums”.
“The explosion of largely foreign-funded class actions is one of the big drivers impacting on insurance concerns in addition to insurers factoring in climate change risks including more extreme weather events,” Mr Willox said.
Ai Group is calling for the insurance industry and governments to address the issue.
“A competitive market environment where adequate and affordable insurance is within reach is in everyone’s interest – and an important foundation for Australia’s economic recovery,” Mr Willox said.
“Without insurance, it becomes nearly impossible to operate, and as we recover from the COVID-19 pandemic we need to seek to reduce costs and participation barriers for business.
“It is clear insurance is a growing concern for industry, and therefore it should be a growing concern for government too.”
As insuranceNEWS.com.au has reported, the Australian Small Business and Family Enterprise Ombudsman has called an inquiry to investigate insurance practices and cover availability after receiving complaints about policy denials and soaring prices.
More than 800 survey responses and 20 submissions are being examined and a report is expected before the end of the year.
Blog Submission: Peter Sellwood
PALTD InsureRight – Insurance & Risk Management
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