Review risk strategies

A BROKER has warned Brisbane companies to prepare themselves for increased insurance costs this year, with the recession and recent natural disasters set to push up risk levels.

Blue Broking CEO Richard Smith, expects the cost of insurable risk to increase for the first time in five years, due to a number of factors such as capital constraints, reinsurance capacity concerns, claim costs and greater pressures for insurers to produce profits from underwriting returns.

“Claim costs are expected to increase — particularly in professional liability classes in the light of the large falls in asset values seen, and the likely increase in litigation that will follow,” says Smith.
He says there will be a significant danger that Brisbane companies may choose to reduce insurance as premiums increase.

“This may suit a small number of select businesses but underinsurance is a significant issue in Australia for both commercial and domestic risks — as highlighted by the incidence of non-insurance in the recent Victorian fire-affected areas.
“Rather than reduce levels of insurance, the emphasis needs to be on achieving the best value with tightening expense budgets.”

He also points out that in times of recession, theft and employee fraud cases tend to increase so companies need to have appropriate insurance in place to cover this risk. Clients are also placing a greater emphasis on counter-party risk, in the event that an insurer might not be able to pay a claim in the future. Smith encourages businesses to proactively involve themselves in the insurance and risk process.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Sushi Sushi catches a new fish with Sushi Musa acquisition

Sushi Sushi catches a new fish with Sushi Musa acquisition

One of Australia's leading quick service retail (QSR) food chai...

Owner of Houston’s Farm, Sunfresh and Gourmet Selections enters administration

Owner of Houston’s Farm, Sunfresh and Gourmet Selections enters administration

A national vertically integrated farming and ready-made salad manuf...

Body Fit Training sets sights on Scandinavia with master franchise agreement

Body Fit Training sets sights on Scandinavia with master franchise agreement

After opening up 42 new studios globally in 2024 to date, Melbourne...

AI is not a magic wand – it has built-in problems that are difficult to fix and can be dangerous

AI is not a magic wand – it has built-in problems that are difficult to fix and can be dangerous

By now, all of us have heard and read a lot about artificial intell...