00:00 — We've had people approach us even recently where the entire system has gone through AI, and it's actually given the advice out the door with no human oversight.

00:09 — AI may help produce the work, but professionals still own the advice. It cheapens every industry.

00:15 — Hello and welcome to Insurance Business TV for our third Professional Risks Power Panel of 2026. We're going to look at what the insurance market's doing right now, including new business opportunities for professional risks brokers.

Our experts are back. Nina Croft is here. She's Director and Northern Manager of Financial, Executive and Professional Risks for Willis. Nina is in Auckland. Also in Auckland, Tom Lemur, Liability Broker with ICIB, Broker Web Insurance and Risk Advisory.

00:45 — And in Christchurch, Ethan Gerard, Managing Director at Gerard's Insurance Brokers. Um, let's kick off with you, Ethan. And Ethan, welcome back to the panel.

Yeah, nice to be here, Danny.

00:57 — Yeah, good to see you. Let's take a look at the PI insurance market. I mean, how's it looking from where you sit? Uh, what's insurer appetite like, and where are you seeing any new business opportunities, if any, in this pretty tough market?

01:11 — Honestly, we're having a great time of it recently. So, as I previously probably said on this, we play more in the small-to-medium-sized business space, and usually if someone's a really small business starting up, they just go directly online to an insurer and they get some tick-box cover that's not really suitable for their needs, but so cheap that we can't compete with it.

Then the step up to get something that's actually adequate is quite substantially more. But now we've got lots of other options in the market. Jules' pricing has come down. We've got some others like Artisan, Agile and stuff that are giving us some great options for these customers that are ready to actually engage with a broker and get some cover that's actually beneficial.

And then on the other side of that, we deal with heaps of construction, and there's quite a bit more risk coming out around the PI cover needed in that space. So we're getting a lot of success in that space as well.

01:58 — Great. And Nina, how are things looking from where you sit?

My perspective, Danny, um, the PI market is generally favourable, as it has been for the sort of last couple of years. I think, you know, where I know in the New Zealand, um, equally Australia and London markets, there's significantly more capacity than there was sort of during the hard market period.

You know, insurers are actively looking for quality PI business, and, you know, there's certainly still competition for well-performing accounts, which sort of is increased at present. And, you know, rates are sort of generally downwards, you know, pushing downwards for firms with good risk management and clean claims histories.

Um, we're also seeing greater flexibility now in this market around sort of limits and excesses, policy enhancements than we have in the last bit. And in fact, you know, this is a market that we are telling our clients, if you've ever sort of wanted to sort of make some upgrades, changes, you know, look at how we, you know, look at things a bit differently. This is the market to do it in because it is quite competitive.

And, um, I mean, but I guess ultimately, you know, the appetite sort of isn't that uniform across the board. Whilst broadly there is a lot of appetite, I'm finding that insurers are still remaining cautious around, you know, professions and activities that have long-tail liabilities attached.

Um, of course, in the construction space, you know, there is still quite a bit of scrutiny, and in the financial services sector, but also businesses that have, you know, meaningful US exposure. So underwriters are still sort of highly focused on governance, claims histories and risk controls.

And I guess, um, when we look at sort of the opportunities, I don't think it's so much about the professions, but more about changing and evolving exposures and perhaps gaps and shortfalls.

Um, also just going back to what Ethan said, you know, there is so much sort of cut pricing going on there. Um, is that sustainable? You know, often clients, because there are financial pressures, will go for, you know, what they can afford, or if they can have a saving, rather than focusing on, you pay what you're ultimately going to get what you pay for.

So, um, yes. So, I guess there's not just sort of new exposures, but, you know, talking to clients and asking additional questions and looking at the risk with new eyes and where there's sort of potential gaps.

So, a simple question I think that we can sort of focus on is, you know, talking to clients and saying, "Hey, if we were building your insurance program from scratch today, would we build it in the same way?"

We can also look at what sort of claims trends are telling us about risks and how losses could happen, how big they could potentially be. Um, so the opportunities are not necessarily sort of with new and evolving risks, but, you know, maybe changing, updating, adding to client programs, identifying risks with an existing program.

So, I'd say just to, um, maybe sum it up, capacity remains abundant, but insurers are still being selective about how they deploy it.

05:21 — Great. Thank you, Nina. And just to preserve some of my journalistic integrity, I should say that when I was talking about it being a tough market, there's obviously a lot of capacity there, but, um, the economic pressures are pretty difficult in New Zealand.

I know, having just visited Auckland. Um, but yeah, capacity is there. And Tom, let's get your view on this. Where do you see the opportunities, and what's insurer appetite like from where you sit?

05:46 — I think Ethan and Nina have covered off pretty well where appetite's sitting, insurer attitudes and typical underwriting there.

Um, what I will say to that is that we are seeing, especially in the SME space, that the underwriting agencies and new entrants are pricing very aggressively, looking to build their market share, where the underwriting requirements there and what they're looking for are generally more relaxed than the more established players within the market and those that are purchasing more reinsurance.

Typically, what this does for opportunities, and I'm looking more on the broker side here, is twofold.

So naturally, there are the opportunities when you're exploring new businesses to knock on every business's door and say we're in a soft market condition. I think businesses are generally getting clued into that because they are proactively asking those questions to their incumbent brokers to start testing the market and understanding that there are opportunities to achieve rate reductions, which, of course, in the current economic climate is, well, nobody likes to pay more than they need to for insurance, right?

Um, of course, that raises the concerns around, you know, you get what you pay for. Are you ensuring that your coverage is correct? If you're broking it correctly, in most instances you should be in the remarketing exercises.

Where I see the other opportunity, and I see this as a twofold, um, two sides of a coin, is looking at programs that have been remarketed in the previous 12 months and within the last renewal cycle by an alternative broker.

Where have they slashed premiums? Have they moved accounts from one insurer to another for significant percentage reductions in their premium? Or what covers been written out? Are they familiar with the wordings? Have they been alerted to gaps in potential coverage between the different wordings? Have there been exclusions that have been missed? Have there been endorsements that haven't been picked up? Um, even things around retroactive dates. Have they been missed in movements of policy?

So there's an opportunity there to review the cover and say, "Yep, you've achieved the rate reduction last year, but maybe your policy isn't necessarily up to scratch."

07:55 — Let's stick with you, Tom. We've been talking about opportunities. Let's talk about some challenges. What do you see as a couple of the big challenges? You mentioned the sort of aggressive pricing of some of the new competitors. Is that a big issue, or are there a couple of other things that are more pressing?

08:11 — The competition, the pricing in the market is always going to present a challenge, both for underwriters and brokers. When you're under attack, or when your accounts go to tender, of course that's going to put pressure on you to deliver those results and to deliver rate reductions relative to what other brokers in the market could potentially achieve.

So there is that pressure to ensure that we're on top of that.

What other challenges that I'm seeing within the market are ensuring that the program is keeping up with the evolution of a business. So what I mean by that is traditionally clients have not had the best history in disclosing updates to their business within each renewal cycle, and so it's just ensuring that the business description continues to keep up with the way the business is evolving.

One particular challenge that I've noticed nationally [is] the increase in contractual liabilities that businesses are facing.

So typically, when we look at those contractual liabilities, as businesses grow, as they expand, as they start to take on international opportunities — obviously the United States is one, but particularly Australia as well — those contracts often contain requirements that specify particular limits that a client has to hold.

Sometimes runoff provisions can make a policy more expensive than the contract itself would potentially be worth for a client.

I sort of look at that as a challenge and, again, just capping off with that, of course it's balancing that price competition with coverage quality, ensuring that you're delivering the best result both financially and in respect to the risk management of the business itself.

09:51 — Thanks, Tom. Ethan, what about you? What do you see as a couple of your big insurance challenges right now?

09:58 — Well, I think Tom covered off the challenges on the cover side pretty well. On my side of things, the biggest challenge is definitely around the expertise in the space, and this is going to be an ongoing challenge.

So, like today, there's a big international in Christchurch who had six in their professional risks team, and over a two-year period all of them left. Now that's a lot of expertise that's gone that's not been replaced.

And then combine that with a lot of the people that know a lot about this sort of cover, and a lot of people that are in the FPRO space are older and aging out, and then there are no training programs in the industry from any insurers or really any brokers that brings people up to speed.

You're going to have, in — I'm finding even now, trying to hire into that space — a real gap opening up over the next five years as these people age out.

So from my perspective, I think from the broking side, we need to do better to train some more people up so we can get that expertise and have people like Tom and Nina around and keep them around and keep them employed, and then let them train the next people so we've got more people to actually come in and give clients the right advice in the space.

10:59 — Great. Thanks for that. Yeah, recruitment's a huge issue everywhere, it seems. Um, Nina, what about you? What are a couple of big insurance challenges you're facing?

11:06 — Um, I think both Tom and Ethan have covered things off mostly, but I guess, again, you know, just retouching on some of those points, you know, sustainability of premiums and coverage is not being quite fit for purpose, or, you know, where there are gaps or where things don't necessarily overlap.

Also sort of niche areas, um, again where there's coverage gaps. You know, potentially if you look at, um, particularly contaminated products policies and manufacturing E&O policies, you know, a really good contaminated product policy doesn't necessarily have manufacturing E&O extensions and won't cover things like pure financial loss.

But we're starting to see, you know, under things under CPI policies, that whilst there has to be sort of a threat of bodily injury, there doesn't have to be physical bodily injury. It doesn't extend to cover where a product is potentially still, you know, fit for purpose, but it's not going to cause an injury, but it leads to some, you know, loss in production.

Sort of those pure financial losses are not covered. So, sort of thinking about how we bring things together and sort of covering those gaps.

I know that one was sort of very specific, but yeah, the sustainability, making sure coverages are fit for purpose.

And I mean, I guess also in the AI space, we keep touching on this. We have in the last time it's understanding how AI is actually being used within an organization, whether, you know, appropriate human oversight exists.

And then I guess the other thing is really differentiating a client's risk story. You know, remains critical in this market.

So, um, if we just come back to this whole, you know, capacity and the challenges, you know, the challenge isn't necessarily obtaining capacity. It's securing the broadest and most fit-for-purpose coverage, and as Tom said, that evolves along with the business with the most sustainable terms.

You know, and I guess, as Ethan said, you know, there is within the sort of larger multinational organizations, we have sort of training programs available and all this sort of stuff about, you know, ensuring that we sort of equip the next generation, as Ethan said, you know, with training and, you know, so they can advise their clients correctly in the space, um, and not just sell a product, but, you know, a service and risk advice alongside.

13:34 — Great. Thanks, Nina. And you touched on AI, and we're going to look at it a bit more closely now.

Um, from what I can tell in my journalistic little hole here, I can see that in the US and Europe, some insurers are adding explicit exclusions, sublimits, others even writing affirmative AI cover.

Here in New Zealand, are you seeing either of those approaches arriving yet, or what's going on in the AI space?

13:59 — Um, as you've touched on, Danny, I think globally, I think we're in the early stages rather than seeing wholesale shifts at the moment.

Um, as you've correctly touched on, you know, in the US, several insurers are introducing AI-specific exclusions or endorsements to remove ambiguity around sort of silent AI exposure.

Um, conversely, though, sort of in parts of the London market, we've begun to see them offering affirmative AI cover or targeted AI extensions, and there are some using sort of exclusions or sublimits.

Um, in New Zealand, um, I wouldn't even say we're somewhere in between. I think we're still very much in that sort of wait-and-see approach.

Traditionally, New Zealand markets have always sort of followed what's happened in the US and flowed through to London and the UK. So we've never sort of jumped on things. We've always sort of taken a bit more of a cautious and wait approach.

So, in New Zealand, certainly, you know, we're not seeing any sort of widespread standalone AI liability products or broad market adoptions on explicit exclusions, etc.

There is one insurer I've seen, when I was reviewing something for a colleague recently, that have actually, you know, confirmed affirmative AI. I can't remember exactly the policy. I'm not sure if it was a PI policy. So that was interesting, but that was sort of the first sort of explicit addressing of AI that I've seen.

Um, however, I guess what we're really seeing is my sense in New Zealand is that insurers are focusing presently more on sort of underwriting discipline rather than, you know, policy exclusions — just looking at questions around AI use during the underwriting process.

So things like, you know, what AI tools are being used? You know, are they public or closed systems? Is there human review over these? Are the outputs independently verified? You know, how is confidential information being protected?

At the moment, I think within New Zealand, those underwriting questions are becoming more important than currently, you know, the wordings or the exclusions themselves.

So, whilst in the UK and US we are probably seeing a more clear shift towards explicit AI treatment, we in New Zealand haven't moved quite as far yet, and the focus is more on scrutinising AI governance. That will ultimately, you know, in the future, drive any wording changes that will arise.

16:26 — Great. Thanks, Nina. Tom, still early days for you?

16:35 — Yeah, still early days as well for me, Dan. Like Nina touched upon, New Zealand hasn't really built any sort of uniformity or move towards either broad exclusions or broad affirmative cover.

I have seen one affirmative AI writing in a policy. It may be the one that Nina was looking at as well, and that was from a cyber side, actually. That's obviously a big consideration for the cyber market, where they wanted to get ahead and just ensure that clients are aware that there is that affirmative AI cover.

Obviously, that's more looking at the deepfakes and the social engineering, as opposed to the professional services and the way that the business is using their AI as tools.

My discussion with the local market, with the underwriters over here, is that they don't see there really being an immediate movement on AI. Again, it's more so a bit of a wait and see to see what's going on in the States, what's going on in Europe, and to a degree what's going on within Australia.

Like I say, I think we're still largely in that silent AI phase. Um, the immediate movement is more likely, as Nina touched upon, to be on that additional underwriting and disclosure rather than being a blanket exclusion or blanket affirmative cover appearing on every policy tomorrow.

17:54 — And Ethan, how are you seeing it?

17:54 — I think these two have really covered it off great. I think I'm just going to reiterate exactly what they said. New Zealand seems to just follow what happens overseas.

You saw it with those cyber exclusions or cyber affirmative cover. Twelve to eighteen months, a couple of years beforehand, it was popping up around the globe and in Australia, and then it came to us.

So it's 100% what's just going to happen again — just going to follow what everybody else does. And in the meantime, I think just from the underwriting side of things, understanding the business will be more what comes into play than the cover side of it.

18:23 — Ethan, let's stick with you. I'm just going to push the AI issue a little bit further because, like you guys have said, it's early days, but there are still firms who are using it.

So presumably you guys are sometimes in situations now where you have to sort of place your PI cover for this firm, but they're using AI. I mean, are you talking with the underwriters about it? I mean, how do you establish a standard of care?

18:47 — I think for us it's around the process.

So, like, we use AI in our business, right? It wouldn't be silly not to, but we use AI and then it is reviewed by the broker, and then it is peer-reviewed by another person before it goes to a client.

So we have quite robust processes around double-checking what happens with AI.

However, for instance, we've had people approach us even recently where the entire system has gone through AI and it's actually given the advice out the door with no human oversight.

And I think being able to articulate that to the insurer so they know what risk is actually being taken on is going to be really essential.

So actually doing a deep dive and seeing the process and then making it, um, on our [clears throat] end, and then being able to relay that to the insurer.

19:29 — Nina, how about you? Is it about establishing a standard of care?

19:33 — Yeah, I think it certainly — AI doesn't lower the professional standard of care. Um, arguably you could say it raises the expectations around the supervision.

I don't think clients or the courts are likely to care whether an error was, you know, had originated from human or a software platform or AI model.

I guess the question will generally remain, or the crux of the matter will be: did the professional exercise a reasonable skill and care and diligence?

I think, you know, brokers and underwriters tend to focus less on the technology itself at present, but more around the controls surrounding it.

So questions both us and insurers would typically sort of explore would be: Is AI being used to assist or make decisions? Is there meaningful human review before the advice is delivered? You know, are the staff trained on appropriate use? Any restrictions on confidential client information being entered into public AI models? Are the sort of governance and approval processes in place, and the like?

So I think sort of just overall, until legislation or case law tells us otherwise, the benchmark is always going to remain the conduct of a reasonably competent professional.

AI may help produce the work, but professionals still own the advice.

21:02 — And Tom, you get the last word this time. I mean, are you having conversations about this despite the fact that it is early days, I suppose?

21:10 — Yes, certainly. Um, there are — yeah.

21:13 — Yeah, we're having the conversations around AI usage. This is, of course, a hot topic for an increasing number of New Zealand businesses.

Um, obviously, we've touched on how businesses evolve, the implementation of AI as a tool — careful to use the word "as a tool" there — to supplement the sort of day-to-day of an employee, of a professional, is a key consideration.

Of course, we've seen pretty public nightmare, humorous sort of legal cases. When I say legal cases, it's lawyers that turn up to court, say, "You know, Mr. X should be found innocent because of this Supreme Court case in 1968." And then the judge turns around and says, "I've never heard of that." Um, what was the foundational basis?

So, of course, there is that concern because no business wants to get caught out like that, either.

In respect to an employee, you can put all the best controls and the best governance in place. It just takes one person to go off the reservation and become increasingly more — they would feel they're becoming increasingly more confident. They're probably becoming increasingly more reliant on AI tools to start supplementing actual key responsibilities.

So, it's one thing to ask them to tidy up your inventory and to point you in the right direction, or, you know, even to give you your prompts for meetings.

It's another thing to say, "Check everything into ChatGPT, Copilot, a clause. Say, 'This is my client. They're coming up, or, you know, for a lawyer, this case is coming up. Please tell me what to do,' and then go from there."

Um, because obviously it cheapens every industry that works within.

Um, would like to see there be more movement from a legislative point of view to tidy this up, but typically with New Zealand, it's a "she'll be right" attitude, and then we'll clean things up once things go wrong.

So, yeah, we certainly would like to see more movement from the legislature. [Laughter]

23:05 — From the legislature. Um, but yeah, Tom, thanks very much for your time. Ethan and Nina, yours too. And thanks for watching Insurance TV. Bye for now.