Summary
Golden linings: Frequent natural disasters have led to premium rises, supporting revenue growth
Abstract
General Insurance in Australia
Natural disasters have been prevalent in recent years, heightening the number of claims insurers incur and forcing them to raise premiums. Higher premium income has been the lynchpin behind revenue growth. The catastrophic 2019-20 bushfire season, 2021-22 floods and the COVID-19 pandemic have eroded general insurers’ profitability. The COVID-19 pandemic also changed the types of insurance claims made. Industry revenue is expected to climb at an annualised 5.2% over the five years through 2022-23, to $89.9 billion. However, volatile investment returns for most of the period have partially offset this trend. A spiking cash rate has propelled revenue, with a 12.2% jump anticipated this year.
The industry includes general insurers and reinsurers. General insurers underwrite insurance policies to cover individuals' and businesses’ financial losses associated with property, casualty, liability and other risks. Underwriting involves assuming risks and assigning premiums. Reinsurers assume all or part of the risk associated with existing insurance policies that other insurers have underwritten.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.
