Financial Services Licensees
Improvements in insurer loss ratios and the robust shift in investment from public to private capital markets, both globally and locally, continues to encourage increased insurer appetite and competition for fund and asset managers. Subsequently, the broad and persistent deployment of insurer capacity has placed further pressure on rates across the market. Reductions of 5 to 10 per cent remain consistent, dependent on strong governance and compliance, along with underlying asset exposure.
Funds with investments in commercial or industrial property and equities are most attractive to insurers and best placed to benefit from reduced premiums and policy enhancements. Positively, funds with exposure to CBD office assets, although being closely monitored, have substantially improved with occupancy rates relatively normalising to pre-covid levels.
Unfortunately, the same cannot be reported for funds with exposure to (mostly residential) property developments, where appetite remains tepid.
New market entrants (insurers) continue to seek the addition of prejudicial policy exclusions in relation to developments, however given the current market conditions more broadly, writebacks are obtainable.
Private credit, mortgage and debt funds continue to be underwritten selectively, pursuant to credit policies, borrower disclosure and default management frameworks. Those secured by senior debt and conservative loan-to-value ratios are considered favourable. Additionally, strong board experience is beneficial to underwriting outcomes.
Renewed appetite for funds with retail investors remains moderate. However, registered managed investment schemes who demonstrate strong regulatory and governance frameworks, including commitment to Design and Distribution Obligations (“DDO”) compliance and complaints management protocols are viewed favourably.
Thanks to a greater focus on compliance, standards and ongoing education, Financial Planners capacity continue to recover. The improved risk profile has led to new entrants from Lloyd’s of London and a number of local insurers re-entering the market resulting in better rates and access to broader coverage. For planners operating under their own Australian Financial Services Licence, there is wider interest.
Licensees for hire and professional trustees remain subjected to very limited capacity from the market. This is largely dependent on their Corporate Authorised Representatives (CARs) exposure to the asset classes as noted above. Further, Licensees must illustrate (with supporting information) they have strict protocols in place for the oversight of CARs as this is a prerequisite for insurers when considering offering terms.
Looking forward, we are of the opinion that said reductions are likely to stabilise moving into the latter half of 2025. This is on the proviso of ASIC’s enforcement priorities shifting directly to property investment schemes and private capital markets generally. In light of ASIC’s announcement that “private credit markets funds surveillance is underway in wholesale and retail private markets” we believe regulatory activity monitoring disclosure obligations, conflicts of interest, valuations, conduct practices in information memorandums and use of ratings will be pronounced and ultimately impact loss ratios1.
Information technology and software-as-a-service providers
There is little change in market sentiment for information technology and software-as-a-service (SaaS) professionals since our January 2025 market update.
Recent legislative changes such as the introduction of the Cyber Security Act and changes to the Privacy Act are impacting managed service providers that are managing and holding data and personal information.
Many insurers are declining to quote managed services providers. It is critical when proposers are approaching the market that the scope of the managed services are properly articulated as doing so elicits terms from interested insurers and ensures the business activities are correctly reflected within the policy schedule
Appetite for US exposure (where turnover exceeds 25 per cent of total) continues to remain constrained.
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 have limited insurer interest.
Cyber preparedness remains an ongoing concern for insurers especially those businesses holding confidential and medical information.
Real estate and property professionals
There is broad appetite for real estate professionals. Insurers remain cautious about strata managers, residential property managers and those with a high percentage of allocations of off plan apartment sales.
We caution that some insurers are imposing onerous exclusions, particularly relating to bodily injury claims arising from residential property management activities. This is a significant concern.
Property managers with strong contract risk management processes, including the use of software to monitor and, where necessary, notify landlords following inspections, urgent repairs and incidents, have access to better rates and more markets.
Insurers remain conservative when quoting property valuers, notwithstanding softening of the interest rate environment. Expertise in more stable asset classes assist in procuring insurer interest. Insurers are monitoring proposers by closely assessing geography, asset type and loss history following the recent flux in the interest rate environment.
Accountants
Rates have stabilised but discounts of 5 to 15 per cent are available for firms with good claims histories and strong internal risk management procedures.
There is limited appetite for firms providing services to public listed companies. New legislative changes such as the new sustainability reporting regime is requiring firms to upskill to ensure advice and practices are keeping pace with the expectations of the new requirements.
For firms that undertake a high proportion of audit services, complete business valuations, or provide research and development taxation advice, there is limited insurer appetite.
Solicitors
Premiums remain stable on top-up placements. Insurer appetite attaching about $30M is abundant both locally and at Lloyds of London. Firms are taking advantage of market conditions to procure higher top-up limits at lower rates.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2025
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- Commercial General Liability
- Motor
- Contractors Plant & Equipment
- Renewable Energy
- Strata
- Claims
- Workplace Risk
- Executive & Professional Risk
- Construction
