Insurance Market Update 2024
Premium rates are predicted to increase this year. However, actuarial firm Finity indicates the pace of increase is weakening and becoming more targeted.
That means they expect more moderate increases for most commercial line risks.
What are commercial line risks?
Commercial Lines are business risks and liabilities that impact business operations. Such risks may include:
- Commercial vehicles
- Worker injury
- Flood damage
- Medical malpractice
- Small business insurance
- Construction projects
- Property damage
- Broken windows
Commercial Lines insurance products cover those types of business risks, for example:
- Property Insurance
- Construction Insurance
- General Liability Insurance
- Worker’s Compensation Insurance
- Business Interruption Insurance
- Medical malpractice Insurance
- Flood Insurance
- Commercial Motor Insurance
Not all companies require the same coverage, and risks vary depending on their operations.
Finity’s forecast, therefore, suggests commercial line premium increases will better reflect the level of risk insurers cover.
More good news
Finity predicts that financial line insurance premiums will stay flat or decline in 2024. the insurance market update states that premium increases for financial lines began to slow mid-year. That’s a notable change from the price hikes of recent years.
For clients, insurers are softening their approach to the price and placement of risk in some areas.
What are financial line products?
Financial lines protect businesses against financial risks that impact the business. Such risks may include:
- Commercial crime
- Cyberattacks
- Third-party claims against directors and senior staff
- Fraud, theft, and embezzlement
- Kidnap, ransom, and extortion
- Employee claims
Examples of Financial Lines insurance products are:
- Directors’ and Officers’ liability insurance
- Cyber, Security and Privacy Protection insurance
- Employment Practices Liability insurance
- Commercial crime insurance
- Professional Indemnity insurance
- Investment management insurance
- Management Liability insurance
- Not-for-Profit Liability Insurance
Finity says the slowdown on Financial Lines is due to increased competition, better technology, and an easing in class action claims, a major driver for premium increases.
However, as lengthy class actions for cyber breaches, regulatory breaches, employment, and discrimination emerge, we have yet to discover the longer-term impact on premiums.
The Value of Your Broker
You can chat with your insurance adviser anytime about your premiums for the year ahead.
In fact, the best time to talk to your broker is when you’re:
- Considering changes
- Planning budgets
- Buying or selling assets
- Considering contractual agreements
That’s because such decisions can impact your insurance cover and, in some cases, may void your existing cover.
Your broker can advise on whether you need to extend, change or reduce your cover.
Should you feel concerned about rising premium costs, a chat with your insurance broker can help you decide where to cut back on insurance while safely managing your financial risk.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
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