Flighty financial lines insurers risk leaving customers in lurch

Flighty financial lines insurers risk leaving customers in lurch

Flighty financial lines insurers risk leaving customers in lurch A leading insurer has raised concerns over the expansion in the number of insurers offering financial lines cover, saying unsustainable businesses could leave customers high and dry.

Suncorp Commercial Insurance claims customers could be left without financial lines cover because their insurer decides to refuse renewal or exits the market entirely because of market conditions.

Edward Rawnsley, national manager professional & financial risk with Suncorp Commercial Insurance said: “Not long ago there were less than 10 insurers providing financial lines in Australia and now there are more than 40.”

“These high levels of capacity in the market have expanded consumer choice, but brokers and customers also need to consider the question of long term sustainability.”

Rawnsley said: “There have been cases in the past of customers being left in a predicament when their insurer decides not to offer them a renewal or to exit the market entirely because of changed market conditions.

 “As Australia’s largest financial lines insurer, the focus for Vero is to offer customers the right cover for their business at a sustainable price,” said Rawnsley.

 “The question that has to be asked is, will this insurer be able to provide me this cover in the long term,” he said.

New entrants have been seeking market share by discounting premiums, leading a recent JP Morgan/Taylor Fry report to warn of declining profitability in the sector.
 
7 Comments
  • Stuart 20/05/2014 9:43:35 AM
    Vero aren't immune from not offering their insured's renewal terms. This isn't a genuine concern but a market leader trying to maintain their market share by muddying waters by inferring instability in an increasingly competitive market. One in which they themselves lead the buying of market share by reduced pricing! Pot v kettle? It comes down to the financial security and balance sheet of the market in question. Appetite changes for all insurers as they're dictated to by the need to provide shareholders return on equity as their number one obligation.
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  • Greg Cottrell - Insurance Professional Dinosaur 21/05/2014 9:37:13 AM
    Does this guy have Dementia or what? or is it selective memory loss? Certainly a case of Pot v Kettle - ONLY 10 years ago I can recall only having 2 players (and very arrogant) left in the financial lines market. Vero/Suncorp did nothing back then to help me place my PI business, wouldn't even quote let alone write something.
    Easy to crow when the market suits you - you should be warning your property & general liability underwriters who are currently cherry picking risks they want to write, particularly in Northern Australia - a void just opens the door for other players to come into the market when the dynamics change- it is already starting to happen.
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  • Damo 21/05/2014 9:50:48 AM
    What a feeble unqualified statement by Vero. Who exactly are they referring to – international insurers such as AIG, Chubb, WR Berkley, ACE, or Lloyds syndicates? Either way, all have very similar long-term financial ratings to Vero, and employ qualified actuaries.

    This is just a whinge by an insurer whose uncompetitiveness is losing them market share, perhaps they need to get their own house in order first? I think the last line says it all, “declining profitability in the sector” – Vero simply aren’t making as much money as they used to!!
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