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Are You Paying Too Much For Your Insurance?

Announcement posted by Rural and General Insurance 01 Oct 2013

RGIB Insurance Broking Thinks You Are

Insurers’ profits almost doubled in the 12 months to 30 June 2013 due, in part, to premium rate rises to recover reinsurance and catastrophe costs – but this lucrative streak is unlikely to last much longer.

But who’s going to have to pay to maintain their lifestyles?

RGIB thinks the insurance consumer will.

Insurers’ profits almost doubled in the 12 months to 30 June 2013 due, in part, to premium rate rises to recover reinsurance and catastrophe costs – but this lucrative streak is unlikely to last much longer.

Insurance profit rose from $2.7bn to $4.4bn, according to KPMG. The rise is said to be a result of earning of premium rate increases, particularly in property, which had been required to recover higher reinsurance and recent natural peril costs.

Insurance profit rose from $2.7bn to $4.4bn, according to KPMG. The rise is said to be a result of earning of premium rate increases, particularly in property, which had been required to recover higher reinsurance and recent natural peril costs.

The rise in profit is also attributed to relatively benign catastrophe claims experience with Cyclone Oswald being the only event costing the industry in excess of $100m; and a mixed investment experience.

However, premium growth has slowed throughout the year. RGIB suggests this reflected the reduced need for insurers to increase premiums to recover the reinsurance and catastrophe event costs of recent years, and the fact that the introduction of flood cover is well advanced.

In fact one of Australia’s leading house-hold insurers still reeling from the floods is to start introducing flood cover as a standard part of cover for residential home and contents policies to keep up with the competition.  

The flood cover comes into force on 14 December and will not have an opt-out feature but, you can bet your bottom dollar if there is the remotest possibility of being affected by flood the cover won’t be available to you.

“It’s really a smoke and mirror thing” says RGIB’s specialist insurance broker Tim Kelly “they give with one hand and take with the other”.

Other analysts also put it down to the competitive market place as newer entrants actively market their brands and products. Other factors include the abolishment of the Fire Services Levies in Victoria and insurers trying to address the issue of insurance affordability.

The insurance industry is facing its toughest ever environment. Whilst the reduction in catastrophic claims together with the benefit of premium increases has combined to produce positive results for the industry as a whole, insurers are walking a tightrope with historically low investment market returns, increasing competition from new non-traditional market entrants and additional pressure on premium pricing as a consequence of concerns by consumers about affordability.

Lean, efficient, innovative, agile and a specific focus on customer needs are likely to be the core attributes of successful insurers into FY14. Competitive pressures will see insurers that do not exhibit these traits falling behind the pack.

As the insurance industry continues to take a good look at itself and its practices, much attention has turned to identifying the changing face of the insurance customer and tailoring policies to suit specific customers needs; that means riskier customers are going to have to pay – a lot more.

That’s where an insurance broker like RGIB can help - RGIB is widely regarded Australia's most innovative insurance broker, arranging insurance cover for all manner of business and commercial enterprises.

While price is a key factor the most important consideration is getting the best cover at the right price – after all no one wants to pay for insurance they don’t, especially from an insurer who will make claims difficult a difficult proposition.

How else will they maintain their ridiculously high profits while purporting to reduce premiums?

RGIB can usually provide a complete solution for all your business insurance needs.

Just contact us …

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