This excerpt from InsuranceNews.com.au provides some background to the increases in prices we are seeing for Professional Indemnity insurance.
Professional indemnity and public and product liability claim payouts cost insurers a combined $2.03 billion in 2017, a rise of 22.5% over the previous year.
The Australian Prudential Regulation Authority (APRA) says in a new update that non-facility professional indemnity claims rose 31.1% to $1.03 billion, and non-facility public and product liability claims increased 14.8% to $1 billion.
The APRA National Claims and Policies Database also shows that payments in 2017 were related to 102,727 non-facility professional indemnity and public and product liability claims that were open during 2017.
APRA says the 2017 underwriting year is the focus of the report’s analysis instead of last year’s figures due partly to resubmissions from Suncorp’s consolidated AAI subsidiary over the timing in the processing of intermediated business.
At December 31 2017, APRA-regulated insurers estimated non-facility professional indemnity and public and product liability payments on open claims were at $4.7 billion, a rise of 35.2% over the previous year.
The proportion of professional indemnity claims estimates grew 42.2% to $2.38 billion and public and product liability claims estimates increased 28.6% to $2.32 billion.
Payments for facility business rose 88.5% to $43 million in 2017.
Insurers wrote $3.95 billion gross premium for professional indemnity and public and product liability classes of non-facility businesses last year, which was up 17.1% from 2016.
Professional indemnity gross written premium increased 20.6% to $1.75 billion and relates to 796,669 risks written during the year, which was up 8.1%. The average written premium rose 11.5% to $2191.