Better investments and underwriting resulted in 6.1% rise in Q3 net premiums.
Australia’s general insurance industry will reach $66.9b (A$98b) in 2025 in terms of gross written premiums (GWP), a GlobalData report projected.
The industry is expected to grow at a CAGR of 5.1% from FY2020 to 2025, boosted by the gradual economic recovery and growing demand for insurance against natural disasters.
Better investment income and underwriting results have led to a 6.1% rise in net premiums in Q3. Motor insurance is the largest general insurance line with 24.4% share of the direct written premium (DWP) in 2020.
It reported lower growth of 2.9% in 2020 due to tighter lending conditions, which are expected to continue in 2021.
Property insurance, the second largest insurance line with 21% share of the DWP, was marked by heavy natural catastrophe losses in 2020. According to the Insurance Council of Australia, the October-November 2020 hailstorm in Queensland resulted in over 8,500 claims on 1 November 2020 alone. Of this, 40% were accounted for by motor claims and the remaining 60% by property insurance.
High losses from wildfires and other catastrophic events have persistently pushed premium prices higher during the last five years. Catastrophe-linked insurance lines reported double-digit increment in prices since Q4 2017, which is expected to continue in 2021.
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