Australia is exposed to extreme weather conditions but the property protection gap remains significant with an estimated total annual uninsured loss of $US3.4 billion ($4.49 billion) states a new report from Swiss Re.
The Australian Commercial Insurance Market Report says although commercial insurance penetration in Australia has remained steady in recent years Australian firms are generally underinsured relative to their peers in the US and the UK.
Last year $US12.1 billion ($15.99 billion) of commercial insurance premium was written in Australia, making it the ninth-largest commercial insurance market in the world. However, penetration was only 0.97% of GDP, compared with 2.4% in the UK and 1.6% in the US, the Australian Commercial Insurance Market Report says.
The report has some sobering stats on smaller enterprises; one in eight Australian SMEs do not have any insurance cover, although SMEs collectively count for about 57 percent of Australia’s GDP they continue to be significantly underinsured.
Evolving regulations and technological progress are changing the risk landscape and shaping the longer-term outlook of liability insurance demand. While different industries are seeking coverage for new and emerging risks, regulators are tightening requirements over data privacy and consumer protection, among others.
Increasing awareness of the potential damage to reputation and business interruption will likely drive growing demand for liability and cyber risk insurance says Swiss Re. You can access the full report here.