Home' Australian Automotive Aftermarket Magazine : Australian Auto Aftermarket e-Zine - Feb 13 Contents AUTOMOTIVE AFTERMARKET MAGAZINE FEBRUARY 2013 45
Over the past six years the Australian and international insurance industry has enjoyed favourable market conditions
with significant levels of competition allowing for premium rate reductions and broader policy terms over most
classes of general insurance.
Whether its business discounts or just finding the right advice, the advantages your business can gain from being an AAAA
member will soon add up. We source the latest, most beneficial and relevant services for the businesses within our industry.
Have a look at some of the newest Member Benefits for AAAA Members.
Post GFC, insurance and reinsurance companies, not unlike other
industry segments, suffered from diminished investment terms.
Coupled with this, several insurers were subject to S&P downgrading,
with some also exposed to significant credit security product
underwriting losses, most notably the well documented US Government
bailout of American International Group (AIG) and XL Group.
While we experienced tighter underwriting practices over the past 18
months, with increased insurer scrutiny on claims performance and
quality of risk profile, the availability of underwriting capacity in Australia
and internationally has ensured a competitive market place.
Where is the market now?
The Insurance Market Cycle (pictured), where insurers experience
swings in profit margins, is an accepted inevitability of the industry and
one that insurers must manage carefully to ensure ongoing consistent
performance for shareholders.
Rate increases and tightening terms are inevitable in the current
environment as insurers absorb the impacts of increasing weather
claims, claims inflation, reinsurance pressures and increasing volumes
of smaller claims.
Recent weather events
Natural peril claims costs from events such as storm, fire, hail and
rain, have been rising steadily since 2007-08.
In the previous calendar year (2011) costs nationally had exceeded
This was twice the $2.14 billion in 2010, and nearly four times the
$1.8 billion in 2009 and $1.1 billion in 2008.
These costs are increasing, but it is not necessarily a new
phenomenon, and the industry as a whole has been somewhat slow in
accepting that these costs are normal or expected.
More frequent events are increasing the average claim size as
demand for services increases.
Events are becoming the norm -- a new normal.
Estimates on recent significant Australian natural catastrophe losses
as provided by the Insurance Council of Australia (June 2011) are as
• Queensland Floods - $2.6b
• Cyclone Yasi - $1b
• Perth Hail Storm - $1b
• Melbourne Storm #1 - $1b+
• Melbourne Storm #2 - $1b+
Following the scale of natural catastrophes material increases are
resulting in claims inflation as a function of supply and demand.
Insurance claims costs in Australia have increased significantly in
the last five years, as have the number of major insurance events as can
be seen from the graph below (the data was extracted from Insurance
Council of Australia website).
Where to from here?
With summer approaching the frequency of climate risks such as fire
and storm increase as such it is imperative that AAAA members review
their current insurance program and ensure that the levels of cover are
adequate to cover the replacement costs of buildings and contents.
For a review of your current program and a competitive alternative
call Gina De Bonis at Austbrokers ABS on 1300 512 769.
Austbrokers ABS is a trading name of Austbrokers Sydney Pty Ltd
ABN 14 061 968 090 | AFSL 244244
AUSTBROKERS ABS' VIEW ON INSURANCE
CHECK OUT SOME OF OUR NEWEST
The AAAA Insurance Program through
Austbrokers ABS has the flexibility to create a
package that reflects individual risk protection
needs. Austbrokers ABS specialise in "all"
classes of insurance and can assist in
packaging a suitable range of insurance covers.
(Austbrokers ABS a trading name of
Austbrokers Sydney Pty Ltd ABN 14 061 968
090 |AFSL 244244)
National Australia Bank is now a major
partner of the AAAA. NAB offers AAAA
members highly competitive merchant banking
rates and better merchant banking solutions.
AAAA's partnership with OzForex allows
businesses which make or receive international
payments, to access to highly competitive
exchange rates, 24-hour trading and secure
transactions, easily and efficiently.
For more information visit
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