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Australian mid-year insurance market update 2023

Mid-year insurance market update 2023
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The general outlook for insurance buyers in Australia is positive as we move into the second half of 2023.

Across most insurance classes, pricing appears to be stabilising. Premium rate adequacy, improving loss ratios and higher investment returns from increasing interest rates have encouraged a return of market competition, albeit cautiously.

Our latest Australian Mid-Year Insurance Market Update 2023 takes a look at the state of market throughout the first half of the year, including local market insights and outlook, coverage trends, insurer appetite, market influences and a detailed breakdown of premium analysis across 12 insurance classes:

  • Property insurance
  • Liability insurance
  • Directors and officers liability (D&O) insurance
  • Professional indemnity insurance
  • Crime insurance
  • Medical malpractice insurance
  • Cyber insurance
  • Construction insurance
  • Private health insurance
  • Accident and health (including international health, corporate travel, group personal accident and sickness)
  • Group life
  • Workers compensation

At a glance

Premiums across most insurance classes increased in the first half of 2023, with the rates of increase continuing to moderate. Some areas, such as D&O, saw premium decreases.

The Australian D&O market saw a much welcomed reprieve last year, following years of significant pricing increases and reduced insurer appetite. A more optimistic claims landscape and insurer focus on growth encouraged healthy market competition that has persisted into 2023, continuing to drive pricing downward.   

Although this year’s property reinsurance treaty renewals were again challenging, competition remained strong among insurers for quality risks with favourable loss records. CAT-exposed accounts remain challenging, particularly for those with US or New Zealand locations.

Across the liability insurance market, insurers generally displayed broad appetite and a willingness to compete for new business, with the exception of US-exposed risks. Insurers remain cautious as profitability concerns and claims inflation continue to drive market uncertainty.

The Australian cyber insurance market began to stabilise in the first half of 2023. As ‘expected’ losses become more predictable, insurers are able to better forecast and price to cover attritional losses. Cyber claims notifications continued to rise.

The impact of COVID-19 has reverberated through the insurance market and continued to be notably evident across medical malpractice, accident and health, group life, and workers compensation insurance markets.

Although the Australian workers compensation market continued to experience challenging conditions due to economic volatility and increased claims, premium impacts were varied across the country in 2023. Victoria experienced the largest increase in average industry/scheme rates, and Tasmania saw the biggest decrease.

For a detailed premium analysis, more trends and insights on the state of market in Australia, please download our full report.