“It’s a win-win at the end of the day.”
It looks like Principle Insurance managing director Elliott Morris (pictured) – who believes there are rewards to be had for those who are ready to put the work in – has found the silver lining amid the hard insurance market. Talking about liability insurance in particular, Morris sat down with Insurance Business to share what he’s observed of late and how his five-month-old business is rolling with the punches.
“I’ve certainly noticed more recently that the liability market is really starting to harden and catch up with the other lines of business,” noted the broking boss. “So, we’re really finding that renewals are 15, 20, 25% on last year’s. Capacity’s reduced drastically, and even the local market has become far more risk-averse.
“You can definitely tell that they’re starting to remediate their liability books, which is forcing us into London more often than not. So that’s a big change in that market, and there’s definitely some challenges there.”
Having to “look outside the box,” Principle Insurance is going beyond the local market where it usually placed such risks. Thankfully, said Morris, the London agency space in Australia and the London market itself have both been “quite supportive” in these times.
The MD explained: “Each time we go to the markets, we’ll obviously touch base with our local market first and foremost. And when I say “local market,” I mean your sort of CGUs and Veros; I’m not saying your Lloyd’s coverholder agencies but your main Australian underwriters. And more often than not now, we’re finding that we’re getting a lot of ‘no’s’.
“That’s when we sort of step outside of that to your Lloyd’s agencies within Australia, so your Brooklyns and the like. And then if they say ‘no’, then we’re finding ourselves having to go directly into London. So, the last risk I’ve placed, I’ve had to place into London, and even that is a $20 million public liability cover. London has even split their capacity on that.”
In Morris’s opinion, there’s no such thing as an easy placement these days, with all products – including liability – just as difficult to place.
“Everything takes a lot of work and you’re certainly earning your money,” he said.
A positive outcome from the challenging market, according to Morris, is the increased education for both the broker and the insured.
“You really need to delve deep into the client’s business because these are questions that are being asked by the underwriters,” he told Insurance Business. “With a hard market, you not only have higher premiums and more conditions on the policy, but insurers are asking more questions about the risk before they feel comfortable.
“So, it prompts us to be far more thorough in our understanding of the client’s business, which is only a good thing. And it also prompts the client to ask more questions when the premiums are higher; they want to understand more about the insurance programme, how it’s set up and what’s driving the increases, what’s driving the conditions that are set.”
Morris highlighted that while it involves more work, he’s never felt closer to his clients than the managing director has since setting up Principle Insurance in 2020.
He asserted: “Once you get to the end, there’s a degree of comfort that you certainly don’t get in the soft market because there’s so much more involved. So, it’s a win-win at the end of the day. It just takes a lot more work and you’ve got to be prepared to put the work in.”
Additionally, Morris revealed that many of the new business calls he gets are from people who had already been to two or three brokerages who “just don’t want to do it”.
“It’s really tough,” he said. “And I guess it just comes down to the broker, and how hard they want to work for it and what they’re willing to do for it. Not every risk is like that – don’t get me wrong – but there are certainly some tricky ones at the moment which test your skill and ability and your patience.”
