Australia’s underwriting agency sector is poised to see rapid growth because agencies are increasingly taking on some risks that general insurers “will no longer accept,” according to a recent white paper from insurtech firm Xceedance.
The white paper revealed the results of a survey of Australian insurance company senior executives highlighting several factors they predict could change the country’s insurance industry within this decade.
And according to Stephen Browne, vice president and country manager – Australia and New Zealand at Xceedance, one of these factors is greater specialisation and the “rise of underwriting agencies.”
“The industry's business model will move more into niche specialisations delivered by underwriting agencies,” said Browne. “Australia now has a proliferation of specialty insurance providers across lines such as performance motor vehicles, marine, antiques, and niche small business insurance products. [And] underwriting agencies are providing added value not just to consumers but to brokers as well.”
Browne pointed to recent figures from the Underwriting Agencies Council estimating its members’ annual gross written premium at about $3.5 billion – a figure he says is growing rapidly because “agencies (providing they can get the capacity) can take on some risks the general insurers will no longer accept.”
“As general insurers’ underwriting guidelines tighten, there are more opportunities for flexible agencies that can use their expertise to write specialty risks,” he added. “[And] as some large carriers reduce their risk footprints, many seasoned insurance professionals are focusing on core specialisations and moving into underwriting agencies.”