Brokers and underwriters have revealed the biggest risks facing their business in 2018 in an annual report.
Brokers listed staff issues, such as retention, training and experience, as their biggest concern, with pricing and profitability second and excess competition and capacity rounding out the podium, according to the 2017 General Insurance Barometer, released by J.P Morgan and Taylor Fry.
Kevin Gomes, Taylor Fry principal and senior actuary, said that the presence of excess capital among the top issues is interesting considering the hardening of the market.
“On the broker side, excess capacity is something that is still very evident,” Gomes said.
“Excess capacity would normally be associated with the soft cycle, so really low rates or constrained premium rate increases; however, insurers have really drawn a line in the sand on ISR, which is sometimes referred to as commercial property, and that particular class of business is really a hardening market.”
Brokers also listed technology, underwriting standards and natural perils/climate change as other big issues facing the market.
Underwriters, meanwhile, see regulatory changes and compliance as their biggest issue with competition, rates and capacity listed second and technology and cyber risk coming in third.
Gomes said that it was unsurprising to see regulation high on the list as the industry has been beset by regulatory activity over recent months. He listed CTP reforms in New South Wales and Queensland,
ASIC’s focus on consumer credit insurance and low value products, as well as the Royal Commission, which will begin sitting this month, and the back-flip on the Emergency Services Levy in New South Wales, as some of the major legislative notes of 2017.
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