News

Insurer expects large increases in premiums

News >>

Insurance Australia Group has made the prediction there will be double-digit rises in insurance premiums in the next year, due to increasing global reinsurance costs.

Reinsurance price increases were only now working their way through the system, but further measures were needed to protect margins according to IAG’s Mike Wilkins. He said they have had a tough few years, mainly driven by external market factors, particularly perils and higher reinsurance costs, but they have started to come through it.

Reinsurers are still trying to recover the huge losses from the various natural disasters that have hit the world, and in particular Australia and New Zealand.  IAG sees the pricing increases for the next year for home and motor in the range of 5% to 10%, some will be more, some will be less.

From an Insurance Broker’s point of view, as part of IAG’s results this week that its insurance business, CGU, nearly doubled its earnings to $258 million.

This follows how Suncorp’s results, announced the same time this week, were also boosted by its broker handled commercial insurance business Vero as well.

  

Last changed: Aug 26 2012 at 11:43 AM

Comments

  1. None Found

Add Comment

Latest News

D&O premium pool ‘must treble’ to return to profitability

A new report – called "Show Me The Money!" by insurer XL Catlin and law firm Wotton + Kearney – is the second in a series of three white papers on securities class actions and their impact on the Directors & Officers Liability (D&O) market. The main conclusion is that Directors’ and officers’ (D&O) insurance premiums are under-priced significantly and need to rise strongly to restore profitability. The main risk areas are those exposed to securities class actions, 

It says Directors & Officer's Side A, Side B and Side C cover has been chronically underpriced since at least 2011, while the frequency of class actions is increasing as more plaintiff lawyers and litigation funders enter the space.

The analysis suggests last year’s overall premium pool of about $210 million would need to increase by at least three times to establish a profitable market, if it is assumed all other factors stay unchanged.

“Recent market developments would indicate most D&O insurers are now endeavouring to restore some semblance of profitability to their portfolios after years of market losses,” the report says.

read more

75% of Cyclone Debbie claims settled

In the 6 months since Cyclone Debbie devastated Queensland and parts of northern New South Wales:

• more than 31,000 homes and business have been repaired or received settlements from their insurance company

• more than 20,000 families have had possessions replaced

• more than 4,500 motor vehicles have been repaired or new vehicles provided

• hundreds of local builders and trades have been working on properties to repair the damage and destruction caused by the cyclone

• over $5 million has been paid EACH DAY to assist local communities, residents and businesses.

read more