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Recent financial results from the major insurers all indicate that the industry is long overdue for a price increase; however the BizCover Small Business Insurance Price Index for the first quarter of the financial year indicates that insurers have not been able to move prices and they have remain flat over the quarter (Graph 1). A win for small businesses!
Prices across all insurance classes were stable across the quarter, and this was reflected across most industries as well. The retail industry did see a slight decline in prices, however the changes were not substantial and premiums have remained high enough to maintain the price increases seen 3 quarters ago.
Despite the need by insurers to force a premium increase to help improve their profitability, it unlikely that this is going to happen in the near future, due to the significant competition and capacity currently in the Australian market.
Michael Gottlieb, Managing Director of BizCover commented “Experience in other markets shows that it is likely that things will get worse for insurers before there is a uniform push to increase pricing across the board.“
Graph 1 – BizCover Insurance Price Index