There’s no doubt that this year has seen significant increases in insurance premiums. Unfortunately, we expect this trend to continue over the coming 12 months, particularly for home and commercial property owners and business owners.
So why are insurance premiums increasing by so much?
We’ve posed this question to many of the insurance companies we work with and the universal answer is ………
increasing claim costs.
The increased frequency and severity of significant weather events has resulted in increasing claim payouts for insurers. If you reflect on the last 4 months, we’ve had floods in Townville, a cyclone in North Queensland, Bushfires in Eastern Victoria and a huge hail storm that passed through Sydney. According to the Sydney Morning Herald, the insurance bill from this storm alone is nearing $675m.
Today, independent data released by the Actuaries Institute revealed that the frequency of extreme weather in the country’s worst affected regions has double compared to the long-term average.
You can read the full report here, however, in summary; the evidence suggests we are getting more extreme maximum temperatures, fewer extreme minimum temperatures and more extreme sea level rises. The expectation now is that this pattern will result in more severe weather events.
Insurers are starting to factor in this ‘new normal’ into their rating models, and this is flowing through to higher insurance premiums.
So, what can you do to reduce your insurance premium?
Shop around. Give us a call and we will gladly review the market to see if we can source you a more competitive insurance solution.
As an insurance broker, we have access to leading Australian insurers and international marketplaces. We will leverage our experience and relationships to negotiate the best outcome for you.