Securing professional indemnity (PI) cover will remain tough for building certifiers and other high-risk professionals as insurers look to cut their losses, according to an Aon report.
Insurers lost $1.03 for every $1 in premium earned in the March quarter, the broker says, citing statistics from the Australian Prudential Regulation Authority.
“With limited investment return, insurers are experiencing increased scrutiny from overseas parent entities and Lloyd’s to return their books to profitability,” Aon says.
“As a result, several Lloyd’s syndicates have stopped writing Australian PI business and Australian insurers are reassessing their appetite for certain professions. Less competition has allowed other insurers to return to profitability by significantly increasing their premiums.”
Certifiers, fire engineers and other consultants caught up in the construction industry’s cladding crisis are encountering triple-figure premium increases – if they can find an insurer willing to provide cover.
“The [PI] insurance market continues to deteriorate and has become severe for some industries,” Aon says in the report.
“Increased claims activity and several large settlements have tipped insurers’ loss ratios to unprofitable. Consultants exposed to cladding have been most heavily impacted. They’re experiencing significant premium increases.
“Looking ahead, the trajectory will continue to worsen for some industries.”
The situation is also grim for lawyers and accountants, as insurers are worried about the rising number of shareholder class actions and mergers and acquisition activities.