The BizCover Small Business Insurance Price Index is indicating that the market for small business insurance continues to benefit from stability in insurance prices, with little movement in the index over the last 9 quarters.
A trend driven by continued competition, as well as capacity in the market.
This has been the case across all insurance classes for small business, all of them seeing little change over the quarter, once again.
As forecast in the last quarter, insurers continued to compete for business, which has meant soft rates across all industries.
One industry which has continued to benefit from this competition is Trades and Services, which has maintained its lower premiums over the 9 quarters, with little movement in prices.
The only areas to see a real increase over the last few years are industries which are more complex to underwrite and have a lower level of competition, with the retail sector being case in point.
Business Packs for the retail sector saw significant prices increase in the second quarter of FY 2015/2016 and have managed to retain these even over the June renewal season, as forecast in the last BizCover Small Business Insurance Price Index.
“Insurers have managed to retain these premium increases due to the complex nature of these products and also the lack of competition in this area,” commented Michael Gottlieb, Managing Director of BizCover.
What’s around the corner?
With recurring bad weather hitting the east coast of Australia and challenger brands winning a greater market share, insurers in the Australian market will be under some pressure when it comes to profits.
However as noted, “Even with this pressure it’s unlikely that we will see any significant changes in price this side of 2017,” stated Michael “Capacity remains strong and there is the continuing threat of increased competition, meaning insurers will do what they can to manage the balancing act of retaining premiums and improving profitability.”