Pricing Adequacy vs Affordability in a Generally Soft Market

Why It Matters

Accurate pricing and transparent broker data are essential to prevent under‑priced policies that erode profitability, while offering insurers tools to keep premiums affordable in a competitive soft market.

Key Takeaways

• Worker-to-worker injury claims still underpriced, driving loss ratios.
• Advertising liability and PFAS chemicals emerging high‑severity exposures.
• Long‑tail lines lack adequate rates due to delayed claim development.
• Accurate, up‑to‑date broker data crucial for proper risk pricing.
• Raising excesses and cleaning coverage can lower premiums responsibly.

Summary

Insurance Business TV hosted a panel on pricing adequacy versus affordability in today’s generally soft market. Managing Director David Jones of Edge Underwriting and liability portfolio manager Ben Allen of High Street discussed how insurers are balancing premium levels with emerging loss trends.

Both speakers highlighted that certain liability lines remain under‑priced. Jones pointed to worker‑to‑worker injury claims, which historically accounted for about 30 % of body‑injury losses and have likely risen, and to new exposures such as advertising liability and PFAS “forever chemicals.” Allen warned that long‑tail, high‑severity classes still lack adequate rates because claims take years to fully develop, while shorter‑tail lines have seen several years of rate increases and tighter underwriting.

Examples underscored the risk: a recent Choice study found only three of twenty sun‑protection lotions met a 50‑rating, exposing insurers to class‑action claims; brokers often provide outdated business descriptions, leading underwriters to assume risk and inflate perceived exposure. Both panelists agreed that clearer, current information—especially on turnover changes, risk controls, and past claim handling—can reduce perceived risk and allow premium reductions through higher excesses or coverage clean‑up.

The discussion signals that insurers must lean on rigorous risk selection and demand higher‑quality broker submissions rather than relying on price alone. Adjusting excesses, removing unnecessary extensions, and fostering strong underwriter‑broker relationships can lower premiums without compromising coverage, a critical strategy as competition intensifies and new liability fronts emerge.

Original Description

Insurance Business TV brings you a special underwriting risks panel on one of the market’s biggest pressure points: pricing adequacy versus affordability in a softening environment. Join David Jones, Managing Director at Edge Underwriting (Perth), and Ben Allen, Portfolio Manager for Liability and CPE at High Street Underwriting Agency (Brisbane), as they unpack where rates may still be trailing today’s claims and reinsurance realities, why risk selection matters as much as price, and what underwriters should be watching across key liability exposures.