The Quarterly BizCover Small Business Insurance Index has shown that Australian SME’s may have enjoyed the end of declining insurance premiums with an increase of 5 points in the second quarter of FY2015/2016, the first increase seen in 10 quarters.
This brings the insurance rates back to the same level as Q4 2013/14 (6 quarters ago). It should be noted that rates are still down 21 percent compared the first quarter of 2012/13.
The major driver behind the increase is a hardening of rates in the non professional sector with Public Liability and Business Packs (predominately covering perils and theft) increasing 4 points. It seems the hardest hit occupation was the retail trade sector including restaurants, cafes, stores etc which saw premium rates increase 10%.
Professional Indemnity have just normalised back to the average prices for 2015.
The unknown is, have we seen the end of declining rates and will prices start going up?
Michael Gottlieb, Managing Director of BizCover commented “Insurers are caught in a corner as the increase in rates is necessary due to the increasing claims loss ratios. However the need for the increase comes at a time of unprecedented capacity in the marketplace and therefore it is unlikely insurers will be able to continue to further push premium rates up. It is a great time to be a buyer of insurance and if businesses are willing to obtain multiple quotes it is likely they could still save on their insurance costs.”