Doing business involves navigating a myriad of risks which makes insurance (compulsory and non-compulsory) an essential element of a successful business. However, insurance appears to be worrying a growing number of Australian businesses.
The Ai Group has heard from multiple companies of different sizes, sectors and regions that are facing some combination of steep premium increases and reductions in scope of coverage, or are unable to secure insurance at all.
Given these reports, Ai Group launched a small investigation into the prevalence, causes and impacts of these problems. The first step was a short member poll in September 2020, to identify whether insurance was a significant issue for businesses, and what problems they were encountering. This was followed by research into possible causes of the reported issues.
- More than half of businesses polled reported unusual trouble seeking insurance in the last 12 months.
- Unusually high premium growth was the most frequently reported problem faced by Australian businesses seeking insurance in the last 12 months.
- A concerning number of businesses are reporting that there is a general lack of insurance options. Because of this, some businesses reported paying an extremely high price, or not obtaining insurance at all.
- Local insurance problems are being driven by global factors.
- COVID-19 has not played a major role in current insurance difficulties, but may still cause concern into the future.