Businesses that have already funded their insurance premiums will not pay more because of this week's cash rate increase. Daniel Gronert (pictured), CEO of Adelaide-based premium funder Arteva Funding, said the decision lands on new lending rather than on loans already written.
"The interest rate increase will not impact customers that already have an insurance premium loan in place," Gronert said.
The Reserve Bank of Australia (RBA) lifted the cash rate target by 25 basis points to 4.60% on Tuesday in a unanimous decision, according to the Reserve Bank's September monetary policy decision statement. The statement noted that three increases had already been made since the beginning of the year, making this the fourth. On Wednesday, the Australian Bureau of Statistics (ABS) reported that headline inflation reached 4.0% in the year to August 2026, up from 3.5% in July, while trimmed mean inflation, which the ABS describes as a guide to underlying trends without the impact of temporary shocks, held at 3.6% for a third consecutive month.
Gronert said the increase in the funder's own cost of capital moves through to quoting quickly.
"The RBA's decision does increase the cost of borrowing for all insurance premium funders and it is expected that this cost will be passed on to new borrowers over the coming days," he said.
So the client of a broker who signed a twelve-month funding agreement in August is insulated for the balance of the term at the rate struck then. A client whose policy renews in October is not and on Gronert's account the quote produced in a fortnight will differ from the quote produced last week on identical premium.
Read next: Premium funding demand surges as SMEs buckle under cost pressures
The line runs through the middle of most renewal books. Agreements already in force are settled and the answer to a client calling about the rate rise is that nothing changes. Agreements yet to be written are exposed and the exposure is a function of renewal date rather than of anything about the risk or the client.
The repricing arrives at a point when premiums themselves are moving in the opposite direction.
Commercial insurance rates in the Pacific region fell 13% on a composite basis in the second quarter of 2026, according to Marsh's Global Insurance Market Index for the second quarter. Property rates in the region fell 15%. Globally it was the eighth consecutive quarter of rate decreases, which Marsh attributed to abundant capacity, strong insurer profitability, lower reinsurance costs and higher investment returns.
Take-up of funding is nonetheless climbing.
"We are seeing a steady increase in premium funding take up across Australia, particularly since the start of the year," Gronert said.
Read next: Rate rise puts pressure on clients to cut cover, broker warns
Those two movements could point away from premium size as the driver. A likely reading is that the pressure sits in client cashflow rather than in the invoice and that businesses are spreading payments they could previously absorb. From the perspective of Arteva, what the funder can see is its own book and so far it is holding.
"We are definitely hearing feedback from brokers that clients are experiencing challenging conditions, however we are yet to hear of any clients reducing cover or shortening terms," Gronert said. "We closely monitor our loan arrears and missed payments, and I'm pleased to say that at this stage we have not yet seen any significant deterioration."
Gronert was explicit that the effect of a rate decision takes a little time to impact.
"The impact of the recent rate increase may take some weeks to be felt, however with further increases forecast in the coming months we will undoubtedly start to see an impact later this year," he said.
After the Insurance Business interview with Gronert, the ABC reported that money markets priced the probability of a November rise at around 20% on London Stock Exchange Group (LSEG) data, while economists at Westpac and EY told the broadcaster they expect at least one more increase before the end of the year.
