The Australian insurance market in 2024 experienced a stabilisation in premium rates and increased competition across many insurance classes.
This year also saw a resurgence in insurer profitability, driven by higher investment returns amid a favourable economic environment.
But what does this mean for you? Here’s an overview of the market and how it will impact you, the insurance buyer.
General Market Trends
After enduring a hard market cycle in prior years, 2024 brought a noticeable softening in several sectors: increased competition emerged as new players entered the market, while existing insurers sought to bolster their market share. Reinsurer treaty renewals earlier in the year were more favourable, further supporting premium stability.
Inflation continued to exert pressure, particularly on property and liability insurance, but these impacts were mitigated by robust market competition and improved underwriting discipline. For businesses demonstrating proactive risk management, rate increases often stayed within single digits or even resulted in slight decreases.
Property Insurance
The Property Insurance market benefited from increased capacity and a milder natural catastrophe season. Rate changes in 2024 varied widely depending on the risk profile, with some experiencing reductions of up to 10% while others saw modest increases. However, sectors with significant exposure to natural disasters or those dealing with specific hazards like lithium battery fires faced tighter underwriting scrutiny and higher premiums.
Insurers also focused on ensuring accurate valuations to prevent underinsurance, especially for business interruption claims.
Liability Insurance
Liability Insurance saw a broad appetite from insurers, with rates largely stabilising. Companies with clean claims records and strong risk management practices enjoyed flat renewals or minimal increases. However, sectors such as construction and industries with U.S. exposure faced more conservative underwriting.
Emerging risks, including environmental liabilities linked to substances like PFAS, remained a concern, prompting insurers to refine their policy exclusions and coverage limits.
See also: Renewable Energy Insurance
Directors and Officers (D&O) Insurance
Directors and Officers Insurance experienced a softening market in 2024, with premiums decreasing by 10% to 25% as competition among insurers intensified. This was especially beneficial for companies demonstrating strong ESG (Environmental, Social, and Governance) commitments and sound financial governance. Insurers continued to focus on regulatory risks, particularly greenwashing and wage underpayment, requiring detailed disclosures from policyholders.
Financial and Professional Lines
2024 marked a year of rate reductions in the financial and professional lines sector. Directors & Officers (D&O) insurance, for example, saw premium reductions ranging from 15% to 25%, driven by increased competition from both local and international insurers.
Professional Indemnity insurance similarly experienced easing conditions, particularly for low-risk professions. However, complex risks such as engineering and construction continued to encounter pricing challenges .
Cyber Insurance
The Cyber Insurance market continued its trajectory towards stabilisation, with premium rates either flat or reduced by up to 10%. The entry of new cyber insurers increased capacity, leading to enhanced policy terms and broader coverage. Notably, insurers showed greater willingness to offer cyber physical damage cover and proactive risk management services.
Mining Insurance
The mining sector continued to face a hard market in 2024, with insurers maintaining a cautious stance due to high exposure to environmental and operational risks. Key challenges included rising premiums, particularly for operations involving coal or other fossil fuels, where rate increases averaged 20%. Additionally, insurers placed significant emphasis on equipment maintenance and valuation accuracy to mitigate breakdown risks, which remain a primary loss driver for mine sites.
See also: Mining Insurance
Workers’ Compensation
Significant legislative changes shaped the workers’ compensation landscape, particularly in New South Wales, Victoria, and Western Australia. These changes aimed to enhance scheme efficiency and address the growing prevalence of mental health claims. Employers were advised to reassess their coverage and engage more deeply with insurers to understand the impact of these reforms on their premiums.
Transport, Agriculture and Farming
The transport and agriculture sectors remained under pressure in 2024, with rising claims costs and a tight insurance market driving premium increases of 20% to 40% for some agricultural risks. Natural catastrophes such as floods and bushfires posed significant challenges, leading to capacity constraints and stricter underwriting criteria for NatCat-exposed properties. Similarly, the transport industry saw heightened scrutiny around driver safety and vehicle valuation, especially as labour shortages persisted.
Claims Trends
Claims trends in 2024 revealed ongoing delays in settlements, largely due to insurer scrutiny over claim circumstances and values. Global supply chain disruptions also contributed, particularly for property claims, where delays in replacing damaged equipment extended business interruption periods.
How This Affects You
As an insurance buyer, these developments present both opportunities and challenges. The stabilisation of rates and increased competition mean you could secure better pricing and broader coverage, provided your risk profile is attractive to insurers.
When it comes to insurance, we need a strategic approach. Inflation and evolving risks like cyber threats and environmental liabilities mean that insurers are more selective, and gaps in coverage could expose you to significant financial loss.
Accurate policy placements and proactive risk management are now more critical than ever. You need to make sure that your insurance coverage aligns with your unique business needs, that your valuations are up-to-date and that you are prepared for new regulatory requirements. Failing to do so could result in underinsurance penalties or missed opportunities for premium savings.
When it comes to claims receiving delays in settlements, at Crucial Insurance, we’ve worked diligently to mitigate these challenges for our clients. By leveraging our strong relationships with insurers and providing thorough, well-prepared claims documentation, we’ve successfully reduced settlement delays for several of our clients.
Our proactive approach, including early engagement with insurers and strategic advocacy, has helped clients achieve faster resolutions and minimise financial impact during these delays.
What’s next?
The insurance market in 2024 offers a mix of stability and complexity. To make the most of the current conditions, it’s essential to work with an experienced and proactive broker. A knowledgeable broker will not only help you navigate the complexities of the market but also ensure that you are consistently and correctly placed. By staying ahead of industry trends and understanding your specific risk profile, your broker can help you avoid unnecessary costs and penalties while securing the best possible outcomes for your business.
At Crucial Insurance and Risk Advisors, we are dedicated to partnering with you to achieve optimal coverage and financial protection. Contact us today to discuss how we can support your insurance needs in this evolving market.
This article was written by Tony Venning,
Managing Director at Crucial Insurance and Risk Advisors.
For further information or comment please email info@crucialinsurance.com.au.
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