Australian insurers are increasingly concerned about taking on “out of the ordinary” risks, AUB Group CEO and MD Mike Emmett says.
Mr Emmett told insuranceNEWS.com.au that makes the group’s “transformative” acquisition of Lloyd’s wholesale broker Tysers all the more important.
He says the recent Austbrokers Conference was dominated by talk on these issues.
“I think everyone is acknowledging, across the industry, that it’s getting harder and harder to place risks, and that insurers are getting more and more skittish about anything out of the ordinary,” he said.
“All the insurers are wanting exactly the same risk. So, they are all focusing on the same type of good business, and there’s an increasing chasm between the need and the solution.
“This just reflects the point around why we need an international solution.”
Mr Emmett says inflation is going to “hurt” insurers and lead to higher premiums.
“The complexity of supply chains, wage inflation and the cost of goods together with the increased frequency and severity of climate events is going to cause an issue,” he said.
“There is such a shortage of building materials and proficient labourers. That is going to definitely cause artificial inflation that is going to hurt the insurers and will have to flow through to premium to remediate the balance sheets.
“We are going to have an extended period where things are just going to be more expensive than we are comfortable with, but arguably they have probably been cheaper than they should have been for a while.”
He says claims volume following the east coast flood catastrophe is impacting customer service for insureds.
“[Insurers] just don’t seem to have the capacity to manage all the short-term claims that have arisen recently.”
Mr Emmett says there was “buzz and excitement” at the conference about the Tysers deal.
“Not only was it the first time since covid that everyone got together, but also the CEO of Tysers was there.
“We only announced the Tysers deal the day before the conference, so there was obviously a big, positive buzz. Generally, the commentary and the attitude were very, very positive.”
Mr Emmett says concern over an industry talent drought was also a hot topic.
“There’s no question that there’s been so much press coverage around the war for talent and the big exodus or whatever they call it, the big resignation.
“We haven’t seen as much of that but you do worry. You just hear all the talk. We haven’t actually seen the level of wage inflation or staff attrition. But everyone’s very aware of all the coverage of it.”
- The next issue of Insurance News magazine will feature an in-depth interview with Mr Emmett.
