Annual remarketing has become the default position on commercial motor fleet renewals and the underwriting agencies competing for that business say they cannot match what major insurers are putting in front of clients to win it. Simon Donovan (pictured), executive general manager at DKG Insurance Group and its underwriting agency Fuse Fleet in Australia, said agencies operating on a fraction of the premium have no way to absorb the reductions the majors are offering.
"It's been brutal," Donovan said to Insurance Business. "There's no other way to describe where we are at the moment."
Donovan dated the pressure back roughly 18 months, to when pricing began to move in March 2025.
"Quite frankly, over the 18 months, it's just been a race to the bottom."
Donovan said the change came from broker behaviour rather than from pricing models.
"The trend now is multifaceted but you've got brokers remarketing every policy every year, which they didn't used to do," he said. "So every single renewal now is a shit fight."
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He said the inquiries have not stopped but the conversation has narrowed. "We're still inundated with inquiries, but the reality is managing brokers' expectations and clients' expectations, to say: we will look at this, but first and foremost, why is the policy going to market? What's the client's desire? What's driving it?"
The answer, in his experience, is rarely about the cover. "And nine times out of ten the broker's saying, 'I just need to get alternate prices.' They've turned into this transactional machine, and they're all doing it."
He said the pressure has not fallen evenly. "I feel as though the underwriters, the agencies, have really suffered here, because they don't have the same capacity or leverage that the insurers have."
Donovan put the difference down to how much of the premium each side keeps. "We operate on a 20% margin. That's it," he said. "Whereas the insurers operate on 100% pretty much. They can do what they do and absorb it in their massive P&L, whereas we can't."
Service propositions have not held against that, he said. "We're in such a difficult position with the insurers in Australia that you can't compete against them. Even with all the bells and whistles of connected insurance and risk management, clients have been offered 20%, 30% reductions just to go to a major insurer. It's hard to compete."
Donovan linked the pressure to client cashflow, pointing in particular to a change in superannuation payment timing that he said came into effect this year and has left small businesses paying contributions alongside payroll rather than quarterly. Macroeconomic conditions feed straight through to cashflow, he said, and the companies Fuse Fleet underwrites are under the same squeeze as his own business. They are more price conscious than they have ever been.
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Brokers are reading that, on his account, and they also know the majors are offering rates they can take back to the client. A broker who does not shop the policy can feel they have failed the client.
He described a profession divided on whether that is an obligation. "Some brokers will say they have to do it, otherwise they'll lose their business. Other brokers will say, we don't have to do it, we just need to manage the conversations with the clients better."
Either way, the outcome at renewal is the same. Donovan said most brokers he talks to now treat annual remarketing as business strategy, which, rightly or wrongly, has produced a cycle in which service has stopped being the deciding factor. Price is.
New business has become harder to win and harder to hold. The flexibility to go after an account is gone, Donovan said, and winning one carries no guarantee it survives the next renewal, because loyalty has thinned.
The underwriters he speaks to have shifted their priority accordingly. "You talk to most underwriters now, their strategy is retain at all costs, because you can't afford to lose on renewal, never mind new business. You're having to make decisions where you can almost write a policy with zero return just to keep the policy."
The effect on growth is arithmetic. Renewing a book at lower premiums, Donovan said, sends the trajectory negative before a single account is lost.
Asked whether the plan was to wait for the cycle to turn, he said that was part of it, alongside servicing the existing book. Nobody knows when it ends, so the approach is to ride it out - but he was clear the present settings have a limit. "That's the challenge for the underwriters at the moment, just riding this out, because they can't do it forever."
Donovan said the agency is not waiting for the answer and has instead diversified and built out a separate part of the business.
