According to KPMG's annual review, the average home insurance premium rose by 19.3%, increasing from $1,070 to $1,277. Similarly, car insurance premiums saw a 12% rise, climbing from $845 to $945. These increases have contributed to the industry's robust financial performance.
The year 2024 was marked by fewer significant weather events, with only two notable incidents: the Valentine's Day storms in Victoria and severe weather in New South Wales and Queensland in April. Consequently, insurers faced $566 million in losses from 49,000 claims, a substantial decrease from the $2.356 billion paid out across 143,900 claims in 2023.
While the profitability of insurers has improved, consumers are expressing concerns over the affordability of insurance. The Australian Competition and Consumer Commission (ACCC) noted that, despite the introduction of the cyclone reinsurance pool moderating price rises in cyclone-prone areas, premiums remain high and continue to climb across much of the country.
Industry experts suggest that the recent profitability may lead to a stabilization of premium increases. However, they caution that the ongoing challenges posed by climate change and the potential for future natural disasters could impact the sustainability of these profits. Businesses and consumers are advised to stay informed about market trends and consider comprehensive risk management strategies to navigate the evolving insurance landscape.
