National broker EBM expects commercial pricing to continue shifting in clients’ favour for the rest of the year.

Its May market review says favourable conditions that emerged in 2023 remain, particularly for non-complex and mid-market placements, with the exception of loss-affected and natural catastrophe-exposed risks.

“After several years of hard market conditions across commercial insurance lines, a distinct softening has become increasingly evident,” the review says.

Factors include greater insurer appetite, increased competition, higher limits, lower deductibles, improved capacity and declining premiums.

“It is expected that the increase in capacity and reduction in premium prices will continue throughout the remainder of 2025 … Notwithstanding any major upset, there is cause for confidence that conditions will continue to improve for many clients, with further rate reductions and increased coverage options.”

Overall, commercial rates have fallen 1%-10%, led by a decline in financial and professional lines that began in late 2023, EBM says.

Declines in cyber and directors’ and officers’ also contributed to the softening.

In property, rates have continued to stabilise, driven by an “upswing in competition” among Australian insurers that started late last year, EBM says.

Clients with well-managed accounts and no claims losses had premium reductions of 1%-10% or increases of up to 5%.

“Conversely, loss-affected and [catastrophe-exposed] clients saw premiums rise by 5%-10%,” the market review says.

In northern Queensland, capacity constraints remain for catastrophe-exposed risks as insurers continue to withdraw from the area.

“This led to some clients looking to alternative risk transfer solutions such as parametric insurance. Insurer appetite for loss-active risks and risks in certain sectors remained low, and placements were challenging.

“Insurers continued to request more detailed information for challenging risks and exposures. For some risks, insurers tightened policy exclusions around flood cover, storm damage and building defects.”

See the review here.