Rising insurance rates have been a bitter pill to swallow for many of us, especially with so many other costs increasing. There is however some good news on the horizon, with some rates starting to reduce or level out.
Commercial property – At the end of last year, we started to see insurance premiums for commercial property rates beginning to trend down. This was however mainly for larger corporates who benefit from more competition when it comes to getting a ‘good deal’, purely by being larger and therefore more desirable to insurers. The good news is that these reductions have now filtered through to smaller businesses as well – especially those with good risk profiles, sound mitigation measures, and clean claim records.
Personal property – The cost of insurance premiums for home, contents, and private car insurance, continues to trend upwards in many regions. The good news for homeowners in Hawke’s Bay however is that home and contents premium rate increases are definitely slowing, after a pretty expensive few years of increases.
Insurance brokers show their worth here, not just by helping you to find the right policy at the best rates but also when it comes to claims time. One insurer provided statistics after Cyclone Gabrielle and the Auckland storm showing that brokers were able to negotiate better claim results (on average $5,000 more for each claim) than the same claim with a direct insurer such as State, AMI, or Tower.
Rural property – Unfortunately, rates are still rising in the rural sector. This is because insurance claim costs continue to increase compared to the premiums paid for farm buildings, houses, and other physical holdings. These assets are disproportionately exposed to severe weather events and insurers are continuing to adjust their premiums to recognise it more fully. A higher risk of natural events such as flooding, hailstorms, scrub fires, and drought in some regions, has resulted in higher insurance premiums over the last three to five years. These trends are likely to continue in the foreseeable future unless a new insurer enters the market to compete with the insurers that currently dominate the rural sector.
Commercial motor vehicles – Similarly, commercial motor vehicle premiums continue to rise with the increased costs faced by insurers having an onflow effect to the end consumer. The escalating cost to repair newer vehicles which incorporate windscreen, bumper, and other technology, are key factors here along with inflation. On the more positive side, the material and labour shortages attributed to Covid in 2021 and 2022 have eased.
We hope to see some positive development in an otherwise static part of the insurance market with two new insurers in New Zealand. We are also hopeful that with insurers attempting to mitigate repair costs, by establishing repair hubs, that the efficiencies made will reduce the overall claim costs on the insurer’s portfolio. For commercial fleets with a good claims record, there will also be an opportunity to generate competition between insurers.
50 years of insurance and risk advice – ICIB Brokerweb is celebrating 50 years of supporting Kiwi businesses with their risk and insurance needs this year. We not only have our ear to the ground in terms of what is happening with insurance premiums across the Hawke’s Bay region but can also draw from our national and international networks to keep you informed. Please drop us a line if you would like a complimentary review of your insurances.
insurance@icib.co.nz
0800 644 444
