In the latest edition of APRA Insight (Issue 2, 2011), APRA reviews the key risks facing the general insurance industry in Australia.
One of the key risks facing insurers is said to be the introduction of broker aggregator sites in the small to medium enterprise (SME) market, allowing customers to more readily identify and exploit the insurer’s pricing structure. APRA notes that the personal lines market in the UK showed that the growth of aggregators has been linked to falling underwriting profits and soft market conditions for insurers.
The article reports that in Australia, broker groups have recently developed price comparison platforms for products sold to SMEs, although APRA notes: “it is too early to assess their impact”. Nevertheless, APRA has urged insurers “to maintain prudentially sound approaches to underwriting and pricing their business” in this more competitive environment.
So the message is: APRA is watching – brokers as well as insurers.
You can read the full article on the APRA website here.
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