Liability insurance risk appetite and the hard market

As anyone who’s been around the insurance industry long enough will understand, insurance markets are fluid, responding to – and balancing – the insurance needs of businesses with those of underwriters to make a profit.

At times, soft markets prevail, where underwriting capacity is plentiful, which can sometimes mean premium reductions for buyers, while at other times the insurance cycle enters a hard market phase, characterised by reduced capacity and rising insurance premiums.



At Miramar, our capacity is provided under binding authorities from other underwriters – in the case of our liability portfolio, it’s underwriters based at Lloyd’s of London – who influence the type of business we can and can’t underwrite.

Lloyd’s portfolio remediation

Miramar Liability Underwriting Manager Dominic Ivory says that the industry is in a hard market phase at present. This has seen a need to improve performance. As a consequence, we’ve needed to adapt and change our risk appetite.

"In response to the present market, Lloyd's imposed requirements on insurers that operate in that marketplace that basically they need to improve their loss ratios," he explains.

"What that's meant in practice is that a number of capacity providers have taken a closer look at their entire portfolios, as well as individual binders and the performance that those binders produce."

Miramar liability risk appetite

Mr Ivory says that the consequence has been an increased focus on specific occupations that have either performed poorly or have the ability to produce large liability claims.

Construction risks are one area that has come under closer review and within that, occupations such as plumbing, which have historically produced large or frequent water damage claims, have become difficult to accommodate.

Liability cover for fire sprinkler installers is also increasingly difficult to place due to a similar claims trend as plumbing, with security firms that provide crowd control services also challenging due to historical losses and the potential for personal injury claims. These are just a few examples.

Mr Ivory says that the situation is unlikely to change over the next year, or depending on how long the current hard market lasts, further restrictions on other risk exposures are possible going forward.

Open market solutions

However, Mr Ivory says that if Miramar is unable to underwrite businesses on its existing binders, it can look beyond its capacity providers to the Lloyd’s open market more broadly to find insurance cover. But, open market solutions typically come with higher premiums and deductibles. For this reason they are generally more suitable for larger business that are better positioned to meet these requirements.

How to help us help your clients

Miramar will contact brokers whose clients may be affected in advance of renewals and work in partnership to find a solution, however, brokers who would like to understand whether a policy will be renewed, or whether Miramar can assist with new business, are welcome to get in touch and start conversations as early as possible.

Mr Ivory adds that, as with any business looking for insurance cover, individual claims history, risk management and operational practices are crucial, and the more information brokers can provide the better.

"The best thing an individual insured can do is improve their risk management practices to ensure that they’re minimizing exposure to having losses. If they’ve had losses, they need to ensure that they’ve implemented demonstrable change to show the insurer that the likelihood of the same loss occurring has been diminished."

For more information about our liability risk appetite, you can visit our risk appetite or liability product page on our website, or for an in-depth discussion on how we can help keep your clients moving forward, you can call us 02 9307 6600 or email us at


Miramar Underwriting Agency Pty Ltd acts for the insurer, certain underwriters at Lloyd’s.