Inflation and rising prices to drive Australian general insurance growth

The Australian general insurance industry is set to grow at a compound annual growth rate (CAGR) of 9.2% from AU$103.1bn ($67.4bn) in 2025 to $146.9bn ($95.7 bn) in 2029, in terms of direct written premiums (DWP), forecasts GlobalData, the data and analytics company. GlobalData’s Insurance Database reveals that Australia’s general insurance industry is expected to grow by 8.9% in 2025, supported by a rise in vehicle sales, growing demand for policies covering extreme weather events, and increasing premium prices across general insurance lines due to high inflation. Sneha Verma, senior insurance analyst at GlobalData, comments: “The general insurance industry in Australia has progressed well and witnessed a higher growth in 2023 and 2024. The growth is driven by increasing health awareness as well as a rise in demand for natural catastrophe (nat-cat) insurance policies. A similar trend is expected to continue in 2025, which will also be supported by a revival in the economy.” Personal accident and health (PA&H) insurance is the leading line of business in Australia’s general insurance industry and accounted for a 34.2% share of the premiums in 2024. It grew by 7.2% in 2024, supported by an increase in demand for private health insurance. According to the Australian Prudential Regulatory Authority (APRA), private health insurance membership continued to witness an upward trend in the June 2024 quarter, with 64,000 Australians securing hospital treatment cover. Verma adds: “High medical inflation due to rising medical costs has led to an increase in the prices of health insurance policies, which will support PA&H insurance growth. According to the Australian Bureau of Statistics, hospital and medical costs have risen by 5.6%, rents by 6.7%, and insurance by 14% from January-September 2024 as compared to the previous year. PA&H insurance is expected to grow at a 4.5% CAGR 2025-29.” Property insurance is the second leading line of business in Australia’s general insurance industry and accounted for 25.8% share of the premiums in 2024. It witnessed a growth of 15.4% in 2024, supported by an increase in the demand for nat-cat insurance policies, driven by the rising frequency of extreme whether events. A rise in infrastructure development will also boost property insurance growth, according to GlobalData. As per the Australian Infrastructure Budget Monitor 2024-25, the infrastructure spending across all states and territories is projected to reach $270.4bn by 2028, marking a $13.8bn increase from the 2023-24 budget. Property insurance is expected to grow at a CAGR of 13.3% during 2025-29. Motor insurance is the third-leading line of business in Australia’s general insurance industry and accounted for a 25.6% share of the premiums in 2024. Supported by a rise in vehicle sales, motor insurance recorded a growth of 12.6% in 2024. According to the Federal Chamber of Automotive Industries (FCAI), total new car sales for the first half of 2024 rose by 6.5% as compared to the same period in the previous year. Motor insurance is expected to grow at a CAGR of 12.7% during 2025-29, says GlobalData. Marine, aviation, transit (MAT), liability, financial lines and other general insurance lines are estimated to contribute for the remaining 14.4% DWP share in 2024. Verma concludes: “The Australian general insurance industry is set to experience consistently high growth over the next five years. However, increasing claim payouts due to rising inflation and an increase in losses due to frequent nat-cat events will remain a significant challenge for general insurers.”

Inflation and rising prices to drive Australian general insurance growth

Rising claims present challenge for sector: GlobalData

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