Insurance Market Update: Construction, Material Damage

We continue to observe changing market conditions in relation to material damage construction risks in 2024.

Local capacity is returning in Australia and the Asia Pacific with appetite from local and international markets improving renewal outcomes.

Premium rates have stabilised, and reductions continue to be achieved where desirable risks are presented to the market.

Insurers are continuing to be disciplined in respect of applying policy sub-limits on renewal to reduce their exposure in the event of any possible severity losses.

Whilst the local insurance market remains more competitive than Lloyds of London, this is beginning to shift. Recent pricing and terms received from overseas based security are much more closely aligned to local markets which is a clear signal that Lloyds will become a bigger threat to local carriers over the remainder of FY24.

For contractors with poor past claims results, or those clients who have a history of changing insurers on a regular basis, capacity is available however sparse in comparison to attractive risks. Insurers are continuing to monitor and review risk management policies and procedures.

Contractors with lower hazard activities and positive claim history are preferred by insurers although these are being reflected in terms and conditions and policy deductibles.