What Does a Softening Insurance Market Mean for Your AR Business?

As we move through 2025, one of the most talked-about trends in the Australian insurance industry is the softening market. But what does this mean in practical terms for Authorised Representatives (ARs)? And how can you adapt your business strategy to stay competitive and profitable?

Understanding the Softening Market

A softening insurance market is characterised by:

 • Increased insurer capacity

 • Downward pressure on premiums

 • Broader policy terms and conditions

This environment typically benefits clients through better pricing and more comprehensive coverage. However, not all product lines are impacted equally.

Those product lines that are most affected where the market is seeing increased competition include: property, commercial motor, business insurance, and liability.

While those product lines that appear less affected or firming include; trade credit, cyber insurance, management liability and directors & officers coverage.

Opportunities and Challenges for ARs

The impact of a softening market varies depending on broker size and client profile:

 • Large brokers often work with clients with complex, bespoke policies who are less likely to switch providers based solely on premium.

 • Smaller brokers typically work with clients who regularly review their options, making rebroking and competitive pricing more critical.

According to Stacy Finnegan, COO of repX: “The opportunities and challenges of a softer market will vary depending on the type of broker you are. However, Increased competition can mean new opportunities to win business with better pricing and broader coverage. But most ARs must also work harder as commission margins decrease, and client expectations rise.”

Opportunities that ARs can seize

 • Access to new providers and improved terms

 • Ability to offer broader coverage and restructure policies

 • Potential to win new business from competitors, particularly those not remarketing or adequately servicing their client’s general insurance needs

Challenges for ARs to consider

 • Increased remarketing of renewals adds administrative burden

 • Heightened competition as brokers and insurers fight for market share

 • Clients becoming more price-sensitive

 • While the softening market has led to widespread declines in premiums, the extent of those falls will continue to vary across different regions of Australia.

Strategic Actions for ARs

To remain resilient and profitable, ARs should focus on two core strategies: delivering value through advice and diversifying their client base.

1. Educate and Add Value to Existing Clients

Tailored advice: When clients find themselves with additional capacity in their insurance budgets, it presents a strategic opportunity to enhance their risk management posture through more specialised and tailored insurance products. Encourage clients to reinvest premium savings toward enhanced coverage limits or previously unbudgeted policies, such as cyber, D&O, ML or trade credit insurance.

Risk reviews: Reassess client risk profiles to identify new exposures due to operational or environmental changes. Support clients to reduce the risk of underinsurance, through accurate valuations or broader coverage.

Thought leadership: Host webinars, share timely insights, and provide updates on emerging risks to position yourself as a trusted advisor.

2. Diversify Your Client Base

Target new industries: Explore industries with steady demand or niche insurance needs to stay ahead in a softening market.

Expand your network: Attend cross-industry events and engage with business owners outside your usual circles.

Invest in marketing: Build brand awareness in new demographics or regions to attract a broader client base.

“In a shifting market, adaptability isn’t optional, it’s the key to resilience and growth.”  recommends Stacy.

Adaptability is Key

The softening market is not inherently good or bad – it’s part of the insurance market cycle, and a shift that requires strategic adaptation. ARs who focus on expert advice, client education, and diversification will be best positioned to thrive.

Need support navigating the market?

Contact the repX team: