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Modest increase in premiums in first half of 2010

“Reasonable slight increases” to premiums experienced by NIBA members so far this year.

By Jeanette Stephen

NIBA has released the findings of its latest annual survey of members, indicating ‘modest’ domestic policy premium increases in the first half of 2010.

The Market Conditions Survey was completed by NIBA members online following the June 30 renewals period.

Among the findings, 66% of brokers reported premium increases for the majority of their clients (compared to 72% last year), while 26% cited no change and the remaining 8% had lowered premiums. 

More than half of respondents (57%) described the general trend as ‘reasonable slight increases’, while 11% had increased fees only for ‘hard-to-place’ risks.

Almost all of those surveyed rated both the domestic and commercial insurance industry as a ‘hard’ or seller’s market,  characterised by higher premiums.

Some trends observed in particular insurance classes included: premium increases of 10% or less for more than half of respondents in Public Liability (61%), Business Interruption insurance (52%), Business Pack (57%) and Property (54%).

Directors’ & Officers’ premiums remained unchanged for 49% of brokers. In Professional Indemnity insurance, 18% of brokers cut premiums within the 10% range.

An average premium rise of 10%-30% was recorded in commercial motor insurances by 24% of respondents.

After 18 months that saw hailstorms, bushfires and floods, expectations of higher domestic premiums were realised, said NIBA’s Chief Executive Noel Pettersen.

“The modest increases across commercial lines indicate prudent underwriting of risks over the last 12 months and strong competition amongst underwriters,” he said.

Mr Pettersen said the survey signalled a gradual return to profit for the industry following losses incurred during the Global Financial Crisis.

NIBA represents 500 insurance broking firms and more than 2600 intermediaries, together handling almost 90 per cent of commercial insurance transacted in Australia.

Key findings

  • 66% of surveyed brokers have increased premiums for the majority of clients
  • 8% reduced their premiums
  • 86% of brokers surveyed rated the domestic market as hard, giving it a score of 5 to 8/10
  • 89% gave the commercial insurance market a hardness rating of between 4 and 7/10
  • Majority of surveyed brokers increased domestic policy premiums between 10%-30%
  • Premiums for commercial lines of insurance rose more modestly with increases of less than 10%.


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