The year ahead So many challenges, so many opportunities. We’ve tackled the key issues for 2022 with industry leaders in insurance, reinsurance and broking By John Deex
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021 was a big year for insurance. The industry was under serious scrutiny thanks to the covid pandemic, while participants also had to adjust to a storm of once-in-a-generation regulatory change. Affordability was front and centre, not only in northern Australia but across a range of locations and sectors as the market went from hard to harder. And climate change – a perennial issue that isn’t going to go away – emerged from covid’s shadow thanks in part to Glasgow’s COP26 conference. Border closures and lockdowns brought their own challenges as supply chains slowed, and talent streams from overseas dried up. That was 2021, so what happens in 2022? We asked industry leaders across Australia how they see the next 12 months panning out. The participants were National Insurance Brokers Association (NIBA) Chief Executive Phil Kewin; Insurance Council of Australia (ICA) Chief Executive Andrew Hall; Lloyd’s General Representative in Australia Chris Mackinnon; Steadfast Chief Executive Robert Kelly; Suncorp Chief Executive Steve Johnston; Aon Head of Commercial Risk Australia Ben Rolfe; WTW Head of Australasia Simon Weaver; Hollard Chief Executive Paul Fahey; Munich Re Managing Director Australasia Scott Hawkins; IAG Group Executive Intermediated Insurance Australia Jarrod Hill; PSC Chief Executive Australia, New Zealand and Hong Kong David Hosking, MGA Managing Director Paul George; Insurance Advisernet Managing Director Shaun Standfield; CBN Chief Executive Richard Crawford and Executive Manager Distribution Leigh Frost; and Resilium Managing Director Ben Hastie.
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February/March 2022
How do you see the hard insurance market developing over the year? The most forthright on this subject is Steadfast’s Mr Kelly, who declares there is no hard market – just the current market, where insurers are pricing to make a profit. And that’s the way it’ll be for the foreseeable future. He believes the “traditional” insurance market is dead and buried. There’ll be no return to a soft market where underwriters drop prices to compete for market share, because regulators and capital providers won’t allow it any more. Other respondents agree that while the rate of rises is slowing, we are not about to see price drops any time soon. “The question is, will it ever go back to the stupidity of the pricing that created the current environment?” Mr Kelly said. “In my view it never will. “I don’t think that the capital markets will allow publicly listed insurers to not produce profits, and on the other side there is the APRA control.” Mr Kelly says that moving away from the traditional market cycle will provide more stability and certainty for consumers. Suncorp says “multiple influences” such as covid, supply chain issues and variability in natural hazards are playing their part “over and above working losses across each class of business”. “All speak to an ongoing focus on underwriting discipline, risk selection and intelligent pricing and the overall market conditions being maintained,” Mr Johnston says. Aon’s Mr Rolfe says conditions for customers are
