What we have seen in June renewals
Whilst the Australian PI insurance market continues to remain favourable for policy holders moving into the second half of 2026, with premium rates decreasing for a consecutive financial year, reductions have taken a downward trend since our January market update. Reductions continue to be available, however these are predicated on claims performance and sector specific considerations as set out below.
Premium pricing trends
Broadly, rate reductions of 5-10% remain available for claims-free firms. Pricing has stabilised from flat to +10% for claims-affected firms, higher-risk professions and those with complex reliance exposures.
Insurer behaviour
The May 2026 APRA quarterly general insurance performance statistics data suggests that that PI loss ratios (62.4%) and net combined ratios (87.8%) ranges remain steady. This indicates that the market conditions are not necessarily loss driven, rather insurers are sacrificing margin as a result of sustained competition for market share, which is instead driving rate reductions.
In this context it is no surprise that we are seeing insurers:
- seek to negotiate via enhanced coverage and deductible structures, as opposed to reduced pricing; and
- deploy sector specific capacity and targeted reductions to ‘quality offset’ their PI portfolios; and
- remain selective where claims severity or aggregation is obvious.
Claims trends
Claims frequency remains relatively stable across most professional classes, however increased severity and quantum does present as a concern. This is being driven by rising defence costs, complex disputes and drawn-out proceedings. ASIC’s record $349.8M in court imposed civil penalties has particularly targeted the consumer credit sector and we continue to observe regulatory proceedings present as a consistent source of notifications.
Advice and reliance related matters continue to manifest into claims, particularly where unitholder losses, collapsed deals, failed developments and/or loan-defaults (by way of example) lead to allegations of inadequate due diligence, feasibility assumptions, lending losses, disclosure and documentation handling. A key trend in this area is the misrepresentation of loan-to-value ratios in disclosure documents and information memoranda, where the basis of calculation (i.e. present or complete value) is not appropriately disclosed, giving rise to negligence and misleading conduct claims.
As a result, insurers remain focused on governance frameworks, supervision practices, documentation standards and risk management maturity as key indicators of risk quality and potential claims outcomes. Client engagement retainers/agreements, conflicts management, file and records management, internal review controls and compliance/regulatory obedience continue to be scrutinised. The ability to demonstrate that professional advice, recommendations and key decisions are supported by appropriate enquiries, documented reasoning and effective internal oversight remains a key differentiator in both underwriting and claims outcomes.
Sector specific considerations
Bellrock has identified the following sector-specific risk trends driving insurer behaviour.
Financial services licensees
Increased regulatory oversight, particularly around private capital markets and financial advisory, has tempered insurer enthusiasm to a degree, with rates for financial services licensees beginning to stabilise. Reductions of between 5-10% are however available, dependent on underlying asset and investment exposure, along with strong governance and compliance procedures. Reductions are notably prevalent on combined specialist policy classes where PI is included as an insuring clause, such as Investment Managers Insurance, and are being influenced by the highly favourable Directors’ and Officers’ Liability market.
Wholesale fund managers with direct investment in commercial/industrial property and equities remain most attractive to insurers, being best placed to benefit from both reduced rates and policy enhancements. Positively, the normalisation of occupancy rates to pre-COVID levels has seen appetite for CBD assets also join this mix.
Private equity and venture capital funds with investment in Australian SME and mid-market portfolio companies are an appealing proposition for insurers. Where managers can illustrate strong due diligence and operational practices, including active involvement and manager board representation within portfolio companies, this is preferred.
Private credit and mortgage funds continue to be underwritten selectively, with insurers scrutinising credit policies, default management procedures and borrower disclosure frameworks. Those secured by senior debt and conservative loan-to-value ratios are considered favourable. Junior debt and mezzanine financing arrangements are less so. Insurer concerns persist surrounding the treatment of assets by managers exercising their power of sale in the event of a default. Policy construction and drafting in circumstances involving the exercise of a power of sale on default are an essential consideration.
Insurers remain cautious as regards funds with direct investment into property development and construction projects. A demonstrable track record of project delivery, along with taking appropriate steps to de-risk projects through feasibility and due diligence of contractors, is fundamental to underwriting outcomes. The Federal Budget also raises questions, yet untested, as to both investor demand and ultimately project costs. Compressed margins, increased costs and delayed commencements all have the ability to impact returns to investors and give rise to claims. Given the uncertainty, underwriters are expected to tread carefully.
Appetite for funds with retail investor exposure remains sound. Registered managed investment schemes that demonstrate strong regulatory and governance frameworks, including commitment to Design and Distribution Obligations compliance and complaints management protocols, are viewed favourably.
Insurer interest in financial planners and advisors continues to rebound locally, with new entrants from Lloyd’s of London and several 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 limited capacity from the market, largely dependent on their Corporate Authorised Representatives’ exposure to the asset classes noted above. Licensees must illustrate, with supporting information, that they have strict protocols in place for the oversight of CARs as a prerequisite to obtaining cover.
Bellrock has observed a number of insurers update and re-issue their financial services licensee-specific policy wordings with broader and more generous cover.
Real estate and property professionals
There is broad appetite for real estate and property professionals. Property managers with strong contracting risk management processes, including the use of software to monitor, detect and notify incidents, are experiencing highly favourable rates as a reward for their proactiveness.
Positively, contingent bodily injury and property damage cover is being offered under PI policies within the sector, traditionally, such covers were subject to prejudicial exclusions, meaning that PI cover is now complementing general liability policies and reducing the risk of insurer demarcation disputes at claim time. This is highly beneficial for development and project managers.
Insurer appetite remains reserved in respect of strata managers and residential property managers, particularly those with high exposure to off-the-plan apartment sales, as a long-tail flow-on effect from poor strata industry practices.
Accountants and auditors
Stability has persisted across the accounting sector, however we are apprehensive about the availability of reductions moving into the second half of the year. The sector has been subject to intensive regulatory scrutiny over the previous 12 months, with ASIC uncovering significant shortcomings across auditing practices, the introduction of the Australian sustainability reporting regime and more recently the inclusion of accounting firms within the newly reformed AML/CTF tranche two reporting groups. Claims trends have reflected advisory errors tied to sustainability reporting and financial disclosure, reinforcing the need for firms to demonstrate competency and strong quality assurance processes. Premium outcomes for existing firms continue to be linked to investment in training and alignment with reporting practices.
IT and SaaS providers
The market for IT and SaaS providers is showing signs of ongoing continued softening. Policies within the sector are traditionally written on specialist IT Liability policy wordings combining PI, Cyber and General Liability. There has been a sustained softening within the Cyber liability market, flowing from strong combined loss ratios over the financial year, with capacity available as a result. However, whilst capacity is available, coverage must be reviewed to ensure appropriateness given the highly nuanced exposures for the sector, claims arising from a single event may be brought against several insuring clauses or policies. This is particularly relevant where a cyber breach gives rise to claims against both an entity and its natural persons for strict liability offences and/or negligence, which following ASIC v FIIG Securities and the Vinomofo Pty Ltd inquiry, remains an ongoing concern. Many policies contain a significant coverage gap that requires specific drafting to treat affirmatively.
Solicitors
The legal profession continues to attract abundant excess or top-up PI insurer appetite, particularly those placements attaching at $20M and above. Both local insurers and Lloyd’s syndicates have been active, enabling firms to secure higher limits at lower rates. Premiums on primary layers have remained largely stable, but competition in the excess market has allowed firms to take advantage of favourable conditions. Claims activity remains concentrated in longtail disputes, with insurers cautious about complex litigation exposures. Nonetheless, firms with clean claims histories have been able to negotiate improved terms and broaden coverage. The regulatory environment, particularly enhanced accountability regimes, has reinforced the importance of rigorous file management and conflict governance, which insurers are increasingly factoring into their underwriting assessments. Overall, premiums for solicitors have been stable with some slight reduction, of up to 10% achievable on excess layers with greater reductions on layers attaching above $100M.
Legal and regulatory developments
The ongoing and highly publicised fallout from the Dixon Advisory, Shield and First Guardian matters continue to influence underwriting sentiment across the financial services sector. Reinforcing the need for licensees to ensure that their PI limit is adequate and not solely based on revenue/fees in order to be complicit with their obligations under RG126.
Aquamore, cladding decisions and professional capacity cases continue to dictate policy drafting and wording considerations. Judicial deliberation on issues such as reliance, causation, apportionment and the scope of professional duties remains particularly relevant for consultants, project managers, certifiers and other advisory professionals operating within the built environment.
The Digital Assets Framework legislation is a positive development anticipated to encourage local market appetite for crypto and other digital asset platform providers. The Framework, by way of tiered implementation commencing 9 April 2027, will require that operators of digital asset and tokenised custody platforms hold an AFSL, subjecting them to enhanced regulatory oversight and statutory insurance requirements under RG126.
The expansion of the Anti-Money Laundering and Counter-Terrorism Financing regulatory regime through the inclusion of Tranche 2 reporting entities came into effect 1 July 2026. This reform will see substantial change across industry, including extending the application of the Act to business sectors which have previously been outside the ambit of the Australian Transaction Reports and Analysis Centre’s (AUSTRAC) traditional reporting entities and hence its regulatory authority. The move signals a complex transition for many businesses, who previously may not have been subjected to such rigorous regulatory and compliance obligations in order to service their clients – this is where we expect challenges to arise and claims to potentially materialise. Bellrock has prepared practical guidance to assist professional services firms with the transition.
AI and technology impact
The adoption of artificial intelligence across professional services continues to accelerate, which we anticipate having a material effect on professional indemnity market moving forward. The impact is not yet realised as claims are yet to materialise due to the long-tail nature of PI and the relatively recent adoption of the technology. We do note the various ‘AI hallucination’ incidences in various Courts across the country, where generative AI tools manufactured or ‘hallucinated’ fake legal citations, which were presented in court by counsel. This presents as the key warning for unchecked reliance on AI outputs.
Whilst AI-assisted advice, research, document generation and workflow automation can reduce cost, this comes with an increased reliance and error risk if not governed appropriately. From an underwriting perspective, insurers are less concerned with the use of AI itself and more so with the frameworks surrounding its use and ultimately how it is utilised in client facing work. Firms will be asked to demonstrate appropriate controls regarding human oversight, quality assurance processes, approval authorities, record keeping and the handling of confidential information.
What policyholders should do now
The current market presents a valuable opportunity for policyholders to revisit both the adequacy of their cover and the quality of the capacity provider supporting their programme. Whilst premium reductions remain available, insurers are increasingly seeking to negotiate via coverage enhancements, broader wordings and improved deductible structures rather than pricing alone. Policyholders should review professional indemnity limits to ensure they remain appropriate having regard to evolving business activities, aggregation exposures, RG126 obligations and the increasing cost of litigation. Limit selection should be driven by potential liability exposures, rather than turnover or revenue alone. Particular attention should be given to policy construction, including civil liability provisions, contractual liability cover, aggregation wording, retroactive dates, investigation costs extensions, reliance limitations and notification obligations. Firms should also take advantage of current market conditions to remediate any prejudicial exclusions and address coverage gaps.
For financial services licensees, policyholders should ensure market, construction, liquidity and investment risks are disclosed comprehensively in any information memoranda. Representations within such regarding loan-to-value ratios need to be abundantly clear as to their basis of calculation, as incorrect disclosure continues to contribute to poor claims outcomes.
For accountants, underwriters continue to scrutinise retainer agreements and advice. The utilisation of favourable contracting provisions is therefore critical for both risk management and insurance premium outcomes. New firms need to ensure that written procedures are in place from day one, or risk paying increased premiums as a result.
For IT and SaaS providers, coverage must be reviewed to ensure appropriateness given the highly nuanced exposures for the sector. Many policies contain a significant coverage gap that requires specific drafting to treat affirmatively.
For solicitors, the outlook for 2026 is continued stability with competition likely to persist in the top-up market. Rigorous file management and conflict governance remain essential differentiators in underwriting assessments.
Given the continued focus on governance, supervision and documentation standards, businesses should ensure that client engagement procedures, disclosure practices, file management protocols, conflicts management frameworks and internal review processes remain fit for purpose. The ability to demonstrate that professional advice, recommendations and key decisions are supported by documented enquiries, clear reasoning and effective oversight remains a significant differentiator in both underwriting and claims outcomes.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
