2021 saw a continuation of the market challenges experienced in 2020, with insurers remaining focused on underwriting profitability and portfolio management.
According to the March 2022 APRA General Insurance Performance Statistics, the average premium for Professional Indemnity has increased by 76% between March 2019 and March 2022. These premium rate increases have been seen across many industries. The Construction Professional Indemnity market is facing ongoing capacity and pricing challenges. In its simplest form, demand is outweighing supply, thereby driving up premiums. Law firm consultancy practices are also experiencing premium increases, though these are stabilising. Insurers continue to manage their capacity and reduce line sizes for this class of business, but it has been encouraging to see some new capacity enter the market recently. In other professions where insurers have over corrected in the last few years, we are starting to see premiums flatten.
Insurers are maintaining coverage reductions applied in previous years in response to pain points such as silent cyber exclusions and sanctions and territorial exclusions. Greater focus is also being applied to underwriting considerations such as ESG, business solvency, the ‘great resignation’ and supply chain challenges.
While the Professional Indemnity insurance market remains challenging, working closely with a broker to identify key drivers and to demonstrate strengths will help to achieve a favourable outcome in the current market conditions.
Download our Professional Indemnity Insurance Market Update for further information.