Casualty (Liability) Insurance Market Recap 2020
On the back of catastrophe concerns throughout the Australian bushfire and flood seasons, the unprecedented emergence of the COVID-19 pandemic resulted in market-wide uncertainty among both insurers and insureds.
Liability insurance premium increases picked up pace in 2020, with the fourth quarter seeing the highest year-on-year pricing increase in the Pacific (15%) since the inception of Marsh’s Global Insurance Market Index in 2012. Excess layer pricing increased at a higher percentage than that of primary layers.
Large losses have impacted insurer profitability, and the Australian liability insurance market’s combined ratio now exceeds 100% for the first time since 2015.
Our general liability insurance market update reveals that while insureds are exploring lower liability limits to align with their Maximum Foreseeable Loss (MFL) estimates, insurers are seeking to refine coverage and reduce capacity, particularly in relation to insureds with high hazard exposures such as North America, catastrophe and tailing dams exposures.
For more insights and trends on the local liability insurance market and 2021 outlook, download our full report.
LCPA No. 21/021
NOTE: This liability report is a part of the 2020 Australian Insurance Market Recap Series – a series of local market insights by insurance class, with a specific focus on the state of market in Australia. Other insurance classes featured in the series include: