Insurance Market Update: Financial Lines
Q2, 2024
As we have witnessed in prior softening markets, the focus on market share and competition can result in favorable outcomes. New and returning insurers do not necessarily have the same level of market knowledge or experiences as those who remained in the market and do not necessarily have the most appropriate policy coverage.
Similarly, they may not have the same level of experience in handling construction PI claims, having been out of the market for some time.
As always, choosing the right insurer/s for your business is a combination of various factors including coverage, claims handling ability and experience and, premium and deductibles.
Some of the "new" entrants are only providing capital on an excess layer basis and are not yet underwriting primary insurance. We are continuing to monitor and work with markets, noting this staggered return, and we expect most of the excess markets to be underwriting primary shortly.
Capacity, however, remains heavily dependent on the size of the business, the nature of work being performed, asset types and risk maturity.
Some of the key issues at present include:
The building and construction industry remains the leading contributor to insolvencies. Karge building companies that have signed fixed price contracts cannot afford to fulfil contracts without losing money due to increased costs. Debtor vigilance is fundamental.
NSW, the new Engineers Registration Scheme commences on 1 September 2024. This introduces a new Practice Standard for professional engineering work that includes a "fit for purpose" requirement. Thankfully, after consultation the strict and effectively uninsurable FFP requirement has been modified.
PFAS/PFOS/PFOA continue to emerge as new areas of risk in the construction and other industries. Safety in Design reports need to address these risks.
The ban on engineered stone commenced on 1 July 2024.
As we have witnessed in prior softening markets, the focus on market share and competition can result in favorable outcomes. New and returning insurers do not necessarily have the same level of market knowledge or experiences as those who remained in the market and do not necessarily have the most appropriate policy coverage.
Similarly, they may not have the same level of experience in handling construction PI claims, having been out of the market for some time.
As always, choosing the right insurer/s for your business is a combination of various factors including coverage, claims handling ability and experience and, premium and deductibles.
Some of the "new" entrants are only providing capital on an excess layer basis and are not yet underwriting primary insurance. We are continuing to monitor and work with markets, noting this staggered return, and we expect most of the excess markets to be underwriting primary shortly.
Capacity, however, remains heavily dependent on the size of the business, the nature of work being performed, asset types and risk maturity.
Some of the key issues at present include:
The building and construction industry remains the leading contributor to insolvencies. Karge building companies that have signed fixed price contracts cannot afford to fulfil contracts without losing money due to increased costs. Debtor vigilance is fundamental.
NSW, the new Engineers Registration Scheme commences on 1 September 2024. This introduces a new Practice Standard for professional engineering work that includes a "fit for purpose" requirement. Thankfully, after consultation the strict and effectively uninsurable FFP requirement has been modified.
PFAS/PFOS/PFOA continue to emerge as new areas of risk in the construction and other industries. Safety in Design reports need to address these risks.
The ban on engineered stone commenced on 1 July 2024.
As we have witnessed in prior softening markets, the focus on market share and competition can result in favorable outcomes. New and returning insurers do not necessarily have the same level of market knowledge or experiences as those who remained in the market and do not necessarily have the most appropriate policy coverage.
Similarly, they may not have the same level of experience in handling construction PI claims, having been out of the market for some time.
As always, choosing the right insurer/s for your business is a combination of various factors including coverage, claims handling ability and experience and, premium and deductibles.
Some of the "new" entrants are only providing capital on an excess layer basis and are not yet underwriting primary insurance. We are continuing to monitor and work with markets, noting this staggered return, and we expect most of the excess markets to be underwriting primary shortly.
Capacity, however, remains heavily dependent on the size of the business, the nature of work being performed, asset types and risk maturity.
Some of the key issues at present include:
The building and construction industry remains the leading contributor to insolvencies. Karge building companies that have signed fixed price contracts cannot afford to fulfil contracts without losing money due to increased costs. Debtor vigilance is fundamental.
NSW, the new Engineers Registration Scheme commences on 1 September 2024. This introduces a new Practice Standard for professional engineering work that includes a "fit for purpose" requirement. Thankfully, after consultation the strict and effectively uninsurable FFP requirement has been modified.
PFAS/PFOS/PFOA continue to emerge as new areas of risk in the construction and other industries. Safety in Design reports need to address these risks.
The ban on engineered stone commenced on 1 July 2024.
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