OLLIE MOORE: Well, hello and welcome back to the Marketplace Insight podcast series, where we're discussing the current state of the market for Q1 and some overarching views on Q2 and going forward. My name is Ollie Moore. I'm the regional placement leader for Australia and New Zealand, and I'm delighted to be joined today by Steve MACDERMOTT, who's our placement leader for Australia. Welcome, Steven.
STEVE MACDERMOTT: Thanks, Ollie. Good to be here.
OLLIE MOORE: So let's just kick off with just from your position, how would you characterize the overall insurance market just coming towards the end of Q1. What are you seeing?
STEVE MACDERMOTT: I think the market is moving. It's really returned to a buyer's market conditions. And that's what we've seen through Q1 and the back end of Q4 of '25. We've seen capacity continue to improve across a number of the major lines, but property stood out by far. There's noticeably more competition, more insurer participation, generally larger line sizes, as insurers really look to maintain the premium volume they have in a competitive marketplace.
OLLIE MOORE: OK. Thank you for that. And just to round coverage, are any notable coverage expansions that you're seeing this quarter and be good to just comment on a few lines of business there.
STEVE MACDERMOTT: Yeah, sure. I think we have seen the return of some appetite from a number of carriers where particularly around natural catastrophe exposures like your flood and your cyclone limits, where we've seen some tightening of those conditions over the past two years. We've seen available capacity and limit it return to the market. So which is good news for buyers, particularly those that need that coverage for exposed risks.
OLLIE MOORE: Does that mean driven-- in '25 or '24 and '25 we saw an influx of new capacity coming into the market. Is that being driven by those new carriers coming aboard, or is it the existing traditional carriers looking to expand through the lens of competition?
STEVE MACDERMOTT: Competition is probably one aspect of it. I think the reinsurance treaty results and the availability of capacity that we saw at one this year is really driving some of this coverage availability, competition not only from the new entrants, but incumbent markets or existing markets who are looking to maintain their portfolios and for that matter grow in a softening market. It's not all about just the price reductions. It's also about the expansion of coverage.
OLLIE MOORE: Yeah, and I think from my side, obviously my background historically has been financial lines. I think we're seeing very similar patterns in the financial lines market. I mean, I think right now, price is important, but it is still a market where actually looking to expand coverage. Now, now's the time as clients to have that conversation with brokers and markets, right?
STEVE MACDERMOTT: Yeah. Totally agree with that. It's about aligning your priorities and what's important. There will always be elements that of price and that that's important. And take advantage while you can. But if you can use some of those savings to then incorporate better coverage into your program, now is the time to do it.
OLLIE MOORE: And would that be a similar lens when looking at retentions and deductibles as well, is there's an appetite to look to reduce those?
STEVE MACDERMOTT: Yeah, to an extent insurers will still rely on the data and the natural catastrophe exposure, for example, just to link that back to my previous commentary. But I think the more coverage elements will be available, depending on how the performance of the individual program has gone, if there is any ability to reduce retentions or deductibles.
OLLIE MOORE: Just moving on to pricing, how would you summarize your pricing trends in Q1?
STEVE MACDERMOTT: Look, I think there's a defined softening in the market. Now, we saw that at the back end of last year where double digit rate reductions were being achieved. That's only further accelerated in Q1 with the competition factors that we've discussed.
We'll see that continuing, in my view throughout 2026, whilst there's this availability of capacity and competition within the marketplace. And look, this is all available because of insurers improved performance from their own financial perspective over the last two years in a relatively lower loss results over that period of time.
OLLIE MOORE: Which is an interesting one, because you translate that to some of the financial lines, markets, and we necessarily haven't seen a slowdown in the claims activity. But even so pricing, I think driven is a theme here. Driven by increased capacity in the market is proof that clients can still get in the majority of cases, significant discounts. What strategies in that pricing context have helped clients achieve the best outcome?
STEVE MACDERMOTT: Well, I think the core fundamentals still apply here, Ollie. It's early engagement. So it gives you time to create that competitive tension with your market carrier. So you've got time to go to the market. Look at optionality, clean credible data that you've reviewed not only from your exposures but previous claims making sure your risk recommendations and the like are up-to-date and just really demonstrating to the market your resilience of your operations and the improvement narrative.
OLLIE MOORE: Yeah, really good points. And finally, looking ahead Q2 in the remainder of the year, what's your-- if you had a crystal ball, what's your view on market dynamics going forward?
STEVE MACDERMOTT: Obviously, very interesting world environment at the moment. But what we're anticipating from the general insurance conditions is this competition to continue. There is appetite for-- appetite returning for sectors that insurers hadn't participated in as they look to keep their portfolio sizes. So we're anticipating continued decline in rate and availability of capacity across a number of sectors.
OLLIE MOORE: Great. Well, thank you, Stephen for your contribution on this episode of The Marketplace Insights podcast and look forward to having another chat.
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