Will Professional Indemnity Insurance Premiums Rise?

An article published on ABC News, suggests that insurance premiums are set to rise, resulting from the global economic slowdown.“Mr Parameswaran says insurers who specialise in professional indemnity, workers’ compensation and commercial property will bear the brunt of those increases.”

In the opinion of BizCover Professional Indemnity Insurance, premiums for most professions are likely to remain stable. While insurers are experiencing an environment which is negatively impacting the asset side of their balance sheet and claims activity has increased considerably, competition is rife and there is still sufficient capacity to keep the lid on rates. The only areas where we expect premiums to increase is in corporate D&O, Financial Services and anything in relation to the housing market.

BizCover’s operating model should facilitate an environment where premiums remain competitive. BizCover allows business professionals to compare Professional Indemnity insurance policies from a range of insurers on their site by answering a few brief questions online. Through pricing and coverage transparency, insurers are motivated to constantly revise prices and terms to provide higher quality and cost-effective policies than their competitors.

A further point to ponder is that with the mass redundancies that have been witnessed, many employees are seeking to become employers, or open up their own businesses. The start-up costs for many of these start-ups include business insurance including Public Liability and Professional Indemnity Insurance (the latter may be particularly important given the current economic environment and risk of litigation). For this reason, the business insurance market, particularly in the provision of policies for SMEs, may not, as the article suggests, contract.