Pacific Insurance Market Report 2014

With record levels of surplus capital in the global insurance market fuelling healthy competition among insurers, 2014 could prove to be another year of favourable conditions for Marsh clients.

…Success in the insurance market goes to those with improving risk profiles, quality underwriting information, and carefully planned and executed placement strategies.

The year 2013 concluded with the most competitive insurance market seen in many years, according to the Pacific Insurance Market Report 2014. There continues to be an influx of new capital into the reinsurance market (estimated at A$10 billion in 2013) and this surplus is fuelling intense competition. The New Zealand market has returned to some normality with insurers competing to repatriate business back from international markets.

Most insurers’ profits in the Pacific region increased in 2013, driven by a benign catastrophe season in Australia, New Zealand, and throughout the world. They have also benefited from increased premiums in the domestic insurance sector, which accounts for around half of Australian market premiums.1 However, signs are very positive for 2014.

Global equity markets performed strongly in 2013, particularly in the second half of the year. The business sentiment is more positive than in recent years, and there is a genuine belief that signs of recovery are real. Resource and infrastructure developments that were postponed in the last two years have a better chance of being launched in 2014, which is good news for the economy and the insurance market.