Giant insurer Allianz Australia is moving its financial lines business to the underwriting agency DUAL Australia. The transfer is the latest shake-up in the local financial lines market. In recent months, two other global insurers: Markel and Everest, announced their market entry.
“This decision doesn’t mean Allianz is withdrawing from the financial lines market,” said an Allianz spokesperson in a statement shared with Insurance Business. “In fact, we believe it’s the best way forward for us to invest and grow in this market by leveraging DUAL’s capabilities.”
In a short video released on Tuesday, DUAL ANZ’s CEO, Damien Coates (pictured above), said “Allianz Australia will remain as the 100% capacity provider for this portfolio.”
However, from October 1, Allianz confirmed that “both existing and new business” will be managed by the agency.
Coates said, from that date, his firm “will take over the underwriting and management” of the portfolio.
His firm’s website describes itself as “the leading underwriting agency in Australia for financial lines insurance.”
However, there’s some new and likely tough competition.
Last month, the global underwriting firm Everest Group announced the launch of an insurance business in Australia. According to its website, the firm has customers in more than 115 countries across six continents. Its media release suggested that local financial lines offerings need improving.
The release referred to Everest aiming to fill “a crucial void for tailored risk solutions in the property, casualty, financial lines, professional lines, and energy and construction sectors.”
Scott Leney, head of Asia-Pacific for Everest Insurance International, said brokers in Australia “need Everest’s financial support, top industry talent and broad suite of specialty products and capabilities.”
In April, Markel, the insurance operation within Markel Group, launched a professional indemnity (PI) offering for Australia. According to a media release, the coverages are focusing on financial lines, including professional and financial risks in areas such as renewable energy.
That followed the firm’s September announcement of a boots on the ground presence in Australia for the first time. Markel opened offices in Sydney, Melbourne and Brisbane simultaneously.
“We wanted to show intent because one of the big questions being asked is, ‘are you serious about this or not?’” said Rory Morison, Markel International’s Melbourne-based managing director. “We also wanted to be crystal clear: ‘yes, we’re here for the long term’.”
Morison said Q4 of last year was used to hire underwriters able to trade in directors and officers (D&O), PI and general liability.
The Allianz statement said “we will no longer operate a separate financial lines business within Allianz Australia.”
“Claims for existing policies will continue to be managed by Allianz,” said the statement.
After the transition, the statement said DUAL will take “carriage of claims for policies that they underwrite.”
According to the Allianz website, the firm’s financial lines policies include D&O insurance, professional indemnity insurance and financial institutions insurance.
The spokesperson said the insurer’s strategy is to form long term partnerships with agencies in specialty classes.
“Alongside their impressive distribution, underwriting and claims expertise, DUAL has an excellent technology platform that will result in an improved experience for brokers,” said the spokesperson.
Recent reports suggest that the international financial lines market has plenty of capacity and competitive prices.
Giant brokerage Aon’s latest Global Insurance Market Overview said D&O capacity “remained abundant and competitive pricing continued amid a market that was generally growth-focused.”
The report said “the market moderation that began in 2023 continued into the first quarter of 2024 amid a broadly growth-focused market environment.”
According to Honan Insurance Group (now part of Marsh), much of Australia’s financial lines market started returning to profitability in early 2023.
In March last year, Honan’s Henry Clark, head of professional and executive risks, said Australian Prudential Regulation Authority (APRA) data showed the overall financial lines premium pool had increased by 20% annually to around $5 billion.
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