Ahead of the Underwriting Agencies Council’s (UAC) Sydney Market Exchange on the 7th of February, we look at what 2025 has in store for the UA sector in Australia.
Recent GlobalData figures show plenty to be optimistic about in Australia’s general insurance market, with 8.9% growth projected for this year and an average of 9.2% annually until 2029. The demand for protection is coming from several directions spanning national catastrophes, greater health awareness, and a resurgence in vehicle sales.
The positive outlook bodes well for the underwriting agency market, which has already seen impressive progress in recent years. A study from Insurance Business found that nearly half of brokers now place at least 30% of their business with underwriting agencies – up on last year – highlighting their vital role in placing a growing diversity of risks across the sector.
But alongside the broad optimism, there are also challenges ahead. Here are a few of the key trends that look set to shape the UA market in 2025:
New agency launches
As investors and entrepreneurs have spotted a chance to fill white space in the UA sector, entry into the market is becoming more accessible, as cross-sector learning steps up. Alongside the Underwriting Agencies Council, incubators like Rhodian are also leading the charge, nurturing new ideas and emerging companies. The organisation launched several new agencies in 2024, including Batch Underwriting, a new shared equity accident, and health (A&H) specialist, and marine-focused Marinex Underwriting. Initiatives like these are clearing the path for more new agency launches in the coming months.
Greater regulation will bring greater resilience
Inevitably, rapid growth means underwriting agencies face greater regulation, with the Financial Accountability Regime (FAR) coming into force in March this year, and CPS 230 to be introduced in July. Aimed at improving risk governance and operational resilience across insurance and wider financial services, the new rules provide a framework for underwriting agencies to introduce best practices, and increase trust amongst customers and partners.
Alongside regulatory changes, UAs should also be prepared for tougher demands from their capacity partners, with Suzanne Smith, executive board member, at the Australian Prudential Regulation Authority (APRA), recently warning insurers about “the risk associated with outsourced underwriting to agencies,” and encouraging strong governance practices “including robust on-boarding and exit plans, elimination or clear management of conflicts of interest, adequate governance resources, and sound data security.”
Capacity and funding become more diverse
The success of Australian underwriting agencies has captured the attention of insurers and investors globally, bringing a wider variety of funding and capacity options for the sector. Last year saw Brisbane-based Argyle Insurance secure backing from global investment firm, Correlation, while CFC, a UK-headquartered specialist insurance provider, acquired Solution Underwriting. Given the positive outlook for the sector, international partnerships look set to become a more regular feature, as ambitious UAs seek the funds to scale and innovate their products and services.
Driving efficiency through technology
But, despite continued investment across the insurance sector, there are still calls for firms to do more to combat rising premiums. As APRA’s Suzanne Smith recently mentioned: “Australians continue to face significant challenges with the affordability and accessibility of insurance.” Underwriting agencies are in a unique position to lead in solving this challenge, channeling their expertise and agility towards innovating the design and distribution of accessible insurance protection, including maximising the power of new technologies and digital tools.
For example, Insly’s team has observed an opportunity for many underwriting agencies to transform how they handle broker submissions, which are now a significant bottleneck in the sales process, involving time-consuming manual data entry for brokers and MGAs. AI-powered tools, such as Insly’s FormFlow, can remove much of this manual work, to help underwriting agencies process quotes faster, reduce costs, and win more business; all providing a strong platform for further growth and innovation in 2025 and beyond.
Insly will be attending the Underwriting Agencies Council Five Sigma AI 2025 Sydney Market Exchange event on 7th February where we’ll be showcasing our new AI-powered tool, FormFlow, designed to help underwriting agencies accelerate submissions handling. We’re looking forward to connecting with representatives from UAs across the market, learning more about their plans for the year ahead, and exploring how digitisation can help them drive growth.
If you would like to arrange a meeting, please get in touch with Märtin Kosk, Head of Sales: martin.kosk@insly.com.
