The end of the 2024 calendar year has continued to see market conditions softening. Insurers are anticipating slower premium growth in 2025, following years of steep increases driven by inflationary pressures, natural disasters, and rising costs. As inflation stabilises the pace of premium increases will follow yielding better conditions for policyholders.
The insurance market is currently shaped by several key factors leading to these conditions:
High interest rates: Decade-high interest rates make long-tail insurance products more appealing to insurers because they can invest the “float” (the money held temporarily before claims are paid) at attractive returns. This drives insurers to focus on increasing premium inflows, as they seek to grow their “top line” revenue.
Role of Insurtech: Technology has transformed the insurance industry in recent years. Insurtech, or the use of technology to streamline and innovate insurance processes, has led to more personalised and efficient products, as well as changes in risk assessment models. The use of artificial intelligence (AI), machine learning, and big data analytics has enhanced various aspects of the insurance business. These technologies are improving underwriting accuracy, speeding up claims processing and enhancing customer service. As a result, insurers can operate more efficiently and offer a better experience to policyholders, while also gaining insights into risk management and pricing.
Movement in personnel: Competitive pressure within the insurance sector has led to a significant shift in personnel, particularly among middle and senior-level professionals. Existing client relationships have been critical when changing employers and this has allowed policyholders continued access to tailored services and competitive pricing.
Increased insurer competition: Not only has the combination of new insurance companies entering the market intensified competition, we have also seen long-standing insurers shift their strategies and appetites regarding industry segments, policy lines and capacity for “higher hazard” business.
The above trends are positive for policyholders and are likely to continue throughout 2025.
Notwithstanding the present buyers’ market conditions, two key aspects could affect the policyholder experience when purchasing insurance through digital platforms or from insurers offering lower premiums:
- Insurers offering inadequate or incomplete coverage: Some insurers, particularly those seeking to capture market share in a highly competitive environment, may offer policies that seem attractive in terms of price but do not provide comparable coverage. These insurers may reduce premiums by offering lower levels of protection or excluding important coverage options, which could lead to gaps in coverage that are not immediately apparent to policyholders. As a result, policyholders may be drawn to seemingly affordable options, only to discover later that their insurance doesn’t fully meet their needs when they file a claim.
- Online platforms misrepresenting risk: With the increasing reliance on digital platforms for insurance quotes and purchases, some insurers or online platforms may be quoting coverage for risks that are not well-suited to digital transactions. Complex or high-risk insurance needs might not be adequately addressed through an online quoting process that simplifies underwriting.
We are still experiencing some poor claims management tactics being deployed. In the current market insurers who engage in these practices are losing significant credibility across the intermediary market.
In very nuanced market segments, and for those with challenging risk profiles, there remains some difficulty. Segments include complex property placements; strata (particularly plans with defects and claims frequency); high value home and contents and hard-to-place construction professionals (structural and geotechnical engineers and certifiers):

Insurance Market Conditions by Product | Bellrock Advisory, 2025
We consider that the insurance clock is at “3 O’clock”:

Insurance Cycle Wheel January 2025 | Bellrock Advisory, 2025
We summarise the state of the market below according to specific areas of risk, insurance product and industry type. For in-depth analysis, please refer to the directory of individual market updates at the end of this overview.
Property
Growing insurer appetite, entry of new market players, and involvement of local underwriting agencies are creating a positive trend for policyholders in the Australian property insurance market. This dynamic typically encourages competitive pricing, with well-managed risks leading to minor pricing reductions and broader coverage options. Premiums are remaining stable, with moderate-risk properties experiencing rollover terms or single-digit increases.
Recent wildfires in Los Angeles, causing over US$20B in insured losses, serve as a reminder of the challenges for global insurance markets. The rising frequency of climate-driven disasters will likely impact insurance premiums and availability for years to come. The Insurance Council of Australia (ICA) draws parallels between the California crisis and Australia’s situation, noting issues like affordability in disaster-prone areas and a widening gap in insurance coverage.
After several years of substantial rate hikes for high-risk industries or assets exposed to natural perils, rate increases have now moderated. Expect increases in the range of 5 to 10 percent. However, underinsurance continues to be a significant concern, especially when it comes to business interruption claims.
Home and contents insurers continue to index sum insured values between 5 and 10 per cent, in addition to these increases, insurers are also applying rate increases on domestic policy rates by 5 to 25 per cent.
Commercial public and products liability
2024 saw rates stabilise with more options available in the market. Policyholders who can demonstrate robust risk management practices are receiving favourable outcomes with reductions around 5 per cent. Hard to place risks (EPS, recycling, PFAS, chemicals, bushfire) are still presenting challenges with insurers who are focusing on rate increases for these accounts owing to higher costs in managing claims and dealing with inflationary pressures.
Motor fleet
The motor insurance market is adapting to keep pace with emerging technologies like electric vehicles (EVs) and advanced driver assistance systems. As these become more widespread, insurers are revising policy terms and definitions to address the new and evolving risks associated with them.
Motor vehicle rates are driven by factors such as fleet size, claims performance and the rising costs of vehicle maintenance and repairs. A well performing motor policy will obtain rollover rates.
Contractors plant and equipment
The Australian insurance market still has a strong appetite, especially for well-managed mobile equipment fleets. There is ample capacity, broad coverage, and preferred rates. The previous supply chain disruptions that created high demand and pressure on the used equipment market are easing.
The ongoing issue of the undervaluation of machinery remains. Policyholders need to obtain accurate market values and replacement costs to avoid underinsurance and shortfalls in the event of a claim.
Construction material damage/property
Market conditions have steadily improved over the past six months, with increased capacity and a stronger appetite from both local and international markets, leading to more favourable renewal outcomes for policyholders. Premium rates have stabilised, with some reductions available for well-managed risks. Insurers are continuing to closely assess and review risk management policies and procedures. Contractors with lower-risk activities and strong claims histories are particularly welcomed, which is reflected in the favourable terms and conditions offered to them. This trend is especially noticeable in the SME sector, where competition in the sub-$10M turnover contractor market is intensifying due to both new market entrants and existing insurers competing for what is seen as lower-risk business.
Construction liability
The Australian insurance market saw significant improvements for clients with rate reductions offered for the first time in many years for well performing accounts and those with strong risk management practices. Established local insurers have adopted growth-focused strategies, while new entrants from both London and Australia have embraced increased competition, expanding their capacity and offering policyholders better options, pricing, and coverage.
Workers’ compensation
Australia’s workers’ compensation schemes reflect the significant changes made in 2024 to address financial pressures and support both workers and employers. Premium rates and scheme regulations may undergo further adjustments as governments and insurers respond to ongoing economic pressures and shifting workplace trends, especially in areas like mental health and return-to-work initiatives. Employers should focus on prevention by creating safe and supportive work environments, investing in mental health programs and proactively addressing risks to reduce injuries and enhance overall employee well-being.
Travel
Both business and leisure travel have been on the rise, despite ongoing economic challenges. Notably, there has been a surge in leisure activities and incidental travel linked to business trips, particularly on international journeys. Insurers are finding it increasingly difficult to manage policies where over 25 per cent of the travel is leisure-related. For standard corporate travel policies, rollover rates are anticipated, while policies with a significant amount of leisure travel are seeing premium increases of 10 to 15 per cent. Savings can be made for businesses that declare business only travel.
Personal accident
Inflation in medical expenses is driving changes in insurer rates. Over the past six months, policyholders have increasingly requested higher wage benefit percentages under their policies, reflecting the need to keep pace with rising living costs across Australia. The trend of slight increases in personal accident policies, including those in the sporting sector, is expected to continue over the next 6 to 12 months. This reflects ongoing adjustments to pricing strategies as insurers respond to evolving risk profiles and market conditions, including healthcare costs.
Executive risk (directors’ and officers’ liability)
The directors’ and officers’ (D&O) insurance market for Australian policyholders has continued a positive transition throughout 2024 driven by new markets citing their ability to support premium reductions.
The risk landscape is constantly evolving, and while premium decreases are still common, the pace of these reductions has slowed. Australian regulators have become more proactive in holding companies and their boards accountable, particularly in areas like cyber, privacy, and greenwashing, signalling an intent to pursue regulatory breaches more aggressively (see our article here). As a result, the pricing and availability of directors’ and officers’ (D&O) insurance may experience increased volatility in the future.
Professional indemnity – Financial Services Licensees
Professional indemnity rates for new wholesale fund and asset managers have decreased to levels not seen since 2016. Investment strategies focused on equities, property (excluding development), and venture capital are particularly appealing to insurers. Reductions of 5 to 10 per cent are being offered, although we remain cautious about how much further premiums can decline. With upcoming legislation, increased regulation, and ASIC’s commitment to pursuing more enforcement actions in 2025, we anticipate premiums will stabilise over the next 4 to 6 months. Additionally, the expansion of capacity from both Lloyd’s and local markets continues to exert downward pressure on rates across the sector.
Professional indemnity – Accountants
Increased capacity from London, along with new local entrants with broader appetites, has significantly improved conditions for accountants. Rate reductions of 5 to 15 per cent have been observed. However, some new entrants have imposed restrictions on certain professional business activities, particularly around providing limited Australian Financial Services (AFSL) advice. It’s crucial for firms to ensure their service descriptions accurately reflect both their past and present professional activities. Appetite remains limited for firms working with publicly listed entities, offering significant audit services, conducting business valuations, or providing research and development taxation advice.
Professional indemnity – Construction professionals
There is ample capacity in the market for construction professionals with most receiving rate reductions with capacity inflows from Lloyds of London.
Activity and asset types are the only deterrent to underwriters. Insurers remain cautious about high rise residential projects however there is sufficient interest where principals and contractors can show a record of successful past projects. Appetite remains limited but is improving for design & construct contractors, development managers, consultants exposed to high rise residential, building certifiers, and structural engineers.
Pharmacy liability
Premiums have remained stable despite a constrained insurance market. The market continues to be influenced by legal expenses related to the HCCC, Pharmacy Council, and s150 actions. Policyholders should expect increases of around 5 per cent.
In response to recent legislative changes, insurers have continued updating their policies to include exclusions for vaping products.
Professional indemnity – Property professionals
There is strong demand for real estate professionals, though insurers remain cautious about strata managers, residential property managers, and those with a significant portion of off-the-plan apartment sales. Property managers who demonstrate strong contract risk management practices, such as using software to track and notify landlords about inspections, urgent repairs, and incidents, have access to better rates and a broader range of markets.
Appetite for valuers remains limited, with insurers carefully evaluating proposers based on factors such as geography, asset type, and loss history, particularly in light of recent fluctuations in the interest rate environment.
Professional indemnity – Solicitors’ top-up
Premiums are steady on excess of loss placements however insurers are continually exposed on larger claims and frequency of claims on conveyancing matters which remain an ongoing exposure for smaller, regional practitioners. Once the policy limits reach $30M, significant capacity is available in the market and rate reductions have materialised.
The potential introduction of ABC Insurance underwritten by Liberty Specialty Markets as a new primary market is awaited pending court approval. This will have a significant impact on the market in NSW as an alternative primary insurer to Lawcover.
Information technology and SaaS
Insurers remain focused on information technology and software-as-a-service (SaaS) businesses operating in a B2B environment, with stable coverage options, wide appetite, and comprehensive protection available. However, appetite for US exposure remains limited when turnover exceeds 25 per cent of total revenue.
Insurer appetite significantly decreases when managed services are provided. It’s essential to carefully assess these services to identify the specific risks they present, ensuring that appropriate coverage is in place.
FinTech businesses operating in higher-risk sectors, such as credit card lending, unsecured personal loans, short-term business overdrafts, lines of credit, and startup business funding, face limited insurer interest.
Cyber
Cyber insurers will be closely monitoring the impact of the new Australian cyber security legislation, which will inevitably lead to increasing scrutiny on organisations and how they respond to data breaches, as well as heightened scrutiny on data processing and how businesses manage their third-party suppliers.
Cyber insurance premiums remain stable, driven by increasing capacity. Insurers expect policyholders to actively address cyber risk at all levels, from the boardroom down, including considering operational exposures.
Insurers are expanding their cyber policy offerings to include comprehensive claims support, vulnerability scanning, and testing. These additions are designed to help mitigate and manage cyber risks before they escalate into larger issues or claims.
Your Bellrock Advisor is here to help you understand market conditions and secure the right coverage for your business needs. Contact your Bellrock Advisor
Continue reading our full range of market updates:
- Insurance Market Overview
- Property
- Commercial General Liability
- Motor
- Contractors Plant & Equipment
- Strata
- Claims
- Workplace Risk
- Executive & Professional Risk
- Construction