The BizCover Small Business Insurance Price Index indicates little movement in the index over the last nine quarters which means that the market for small business insurance continues to benefit from stability in insurance prices.
This is a trend driven by continued competition, as well as capacity in the market and has been the case across all insurance classes for small business.
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,” says 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, Gottlieb notes: “Even with this pressure it’s unlikely that we will see any significant changes in price this side of 2017. 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.”