Underwriting agencies chasing Australian commercial motor fleet business say the pricing has stopped making sense. QBE, which sells about 85 per cent of its motor business through brokers, is not arguing with the diagnosis. It is arguing with the response.
Simon Donovan, executive general manager at DKG Insurance Group and its underwriting agency Fuse Fleet, told Insurance Business last month that annual remarketing had become the default position on fleet renewals. He said that agencies operating on a fraction of the premium had no way to absorb the reductions the major insurers were putting in front of clients.
"It's been brutal," Donovan said. "There's no other way to describe where we are at the moment."
He dated the pressure back roughly 18 months, to March 2025.
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Anthony D'Oca, general manager commercial and people risk at QBE Australia Pacific, was asked whether "brutal" overstated it. He said QBE was seeing significant cost pressure around market pricing across all segments and that commercial motor in particular had moved away from several years of consistent pricing that reflected the cost of offering the product.
What he would not accept is that pricing at current levels can hold.
"You can only price beneath the cost point for a certain period before we affect our customer," D'Oca said.
D'Oca put the speed of the correction down to the mechanics of short-tail business. Premium is booked and earned within the same policy period, so there is no tail. That makes the class easy to enter and equally easy to leave, which is what draws capital looking for a quick return.
"So a capacity provider who may see an opportunistic play of earning 8 or 9% return on capital in a buoyantly priced market may opportunistically come in, but they may also opportunistically leave the market quite quickly," he said.
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He named agencies, managing general agents (MGAs) and offshore providers as where QBE is seeing that behaviour. Marsh's Global Insurance Market Index put the Pacific composite rate decline at 13 per cent in the second quarter of 2026, the eighth consecutive quarter of global decreases, which Marsh attributed in part to surplus capital and lower reinsurance costs. QBE is a local market, D'Oca said, and is careful about the message it sends brokers and customers both through deep discounting and through raising price sharply. The stated preference is consistent pricing over an extended period.
That discipline has a price and D'Oca named it.
"We are losing share as a result of that but we're comfortable if the customer or the broker seeks that lower price and we don't think it's sustainable, that they have the right of choice," he said.
This honest assessment puts the broker front and centre when it comes to changing cover on the basis of price.
Donovan's account of the agency side runs the other way. He said most underwriters he speaks to are now working to retain at all costs, to the point of writing a policy at close to zero return rather than lose it at renewal. D'Oca also said the frustration runs in both directions, pointing to discussion in the Steadfast and Marsh broker surveys where partners had raised concerns that pricing is too volatile, currently on the reduced side and were as uncomfortable with it as QBE.
Looking ahead, D'Oca said the capacity that came into the class opportunistically can leave it just as quickly. Donovan will likely be hoping that change happens soon because the underwriters riding the cycle out cannot do it forever.
