Honan reveals insurance predictions for 2019

Honan reveals insurance predictions for 2019 | Insurance Business Australia

Honan reveals insurance predictions for 2019

Honan Insurance Group has predicted challenging buying conditions for insurance in 2019, impacted by the Hayne royal commission, the resubmission of Lloyd’s business plans, Brexit, economic factors, and an overactive merger-and-acquisition environment.

“We are already witnessing global underwriting markets in Lloyd’s ceasing to write certain classes of business such as professional indemnity and marine – and we expect this to continue,” said Andrew Fluitsma, Honan CEO for Australia and New Zealand. “Honan also expects a continuation of upward pricing pressures throughout 2019, bringing with it another challenging buying year for businesses. Insurer risk selection and appetite will continue to drive underwriting behaviour leading a growing rating/pricing gulf between low hazard and less desirable occupancies. Underwriting profitability remains the key performance metric in the medium term as insurers continue to focus on good performing and risk-managed businesses.”

According to Honan, due to the challenging position insurers found themselves in throughout 2018, whereby previous strategies to build market share through top-line premium growth were replaced with the need to bolster bottom-line profitability, some came to consider exiting the business should the underwriting recalibration not yield acceptable levels of profitability.

Travis Wendt, Honan’s head of broking and carrier management, said communication and relationships are pivotal amid the challenging market.

“Relationship flexibility still exists in the wider market but only if the right messages are communicated – and communicated early,” Wendt said. “Insurer selection, transparency, relationship management, and ‘selling’ your individual risk profile to the market is critical to not only help mitigate prevailing market issues but also to assist your company to stand apart during this market correction.”

The insurance predictions were included in the recently released Dec. 2018 Quarterly Market Update.