2018 was a challenging year for insurers and advisers alike, and nobody knows that better than the ones who support brokers on a day to day basis.
According to Jo Mason, CEO of New Zealand’s largest cluster group NZbrokers, a hardening insurance market and the changing regulatory landscape were the biggest challenges for brokers in the past year, and an ongoing shift in insurer’s appetites for risk has also thrown up some hurdles in securing coverage.
“While we enjoy negotiating, the hardening insurance market and the number of negotiations required to manage both clients’ and underwriter expectations can be very frustrating,” Mason told Insurance Business. “This has been challenging, but it is typical hard market behaviour. The changing regulatory landscape and getting our heads around what it all means is still not completely clear, so wanting to take action now becomes challenging.”
Mason says that insurers are increasingly adjusting the levels of risk that they are willing to cover, and developing a broader range of insurer relationships is going to become key for brokers over the next few years.
“Over the past 24 months, some of the more traditional insurers have changed their stance on what they will insure, which has included major price increases, reduced coverage, and in some instances withdrawing from markets altogether,” Mason said.
“Some examples of this are the reduced capacity in the high-risk earthquake zones such as the lower North Island, the stance most major insurers are taking on EPS buildings, and insurers’ withdrawal form certain markets – for example, QBE withdrawing from the personal lines market in early 2018.
“To combat this, brokers are developing relationships with more niche insurers and underwriting agencies which they haven’t had before,” Mason explained. “This is giving them a much wider network use for the hard to place risks.”