The market changes in the Insurance industry will have a particular impact for those professions who must carry Professional Indemnity Insurance in Australia. 2009 saw the signs of a returning hard market in all areas of insurance with numerous losses reported and profitability being offset by modest premium increases in 2009, with more predicted in the coming years.
A JP Morgan report indicates a return of the hard market with fewer insurers out there and increased claims hiking premiums for Professional Indemnity Insurance with increases unseen since the 2001 market debacle.
Other news has reinforced the opinion that insurers will be forced to return to profitability after years of losses and falling premiums as they attempted to compete in a soft market with global competitors. The effect of a hard market may be mitigated in some measure by competition from global insurers however profitability is a mandatory in the current economic climate even for International insurers and significant increases are a surety particularly in lines such as Professional Indemnity Insurance.
Industry analysts are quiet about the exact rate professionals can expect to see over the next few years but there is a reduction in capacity expected as well as premium rates and increases up to 30% have been speculated as possible for across all classes including Professional Indemnity Insurance.
The changes in the insurance field are said to be by some, a return to financial responsibility and profitability, however the impact on those required to carry Personal Indemnity Insurance may be further financial hardships and a struggle to retain or achieve profitability in already difficult times.
Time will tell if the market changes and increased premiums will benefit all, however the falling premiums for all insurance over the last several years have placed the Insurance industry and many insurers on shaky financial ground.
