Australia’s non-life insurers sustain profit with firm reinsurance terms

The sector also remains dominated by IAG, Suncorp, QBE and Allianz.

Australia’s non-life insurance market delivered solid results in fiscal year 2024, with revenue up 9.6% and a net combined ratio of 89%. 

Profitability was supported by higher premiums and improved investment returns despite pressure from inflation and natural catastrophe losses.

Cyclone Alfred in March 2025 led to $803m in insured losses, though most were covered under the government’s Cyclone Reinsurance Pool. 

The industry’s capital strength remained stable, according to Gallagher Re’s APAC Market Watch 2025, with a Prescribed Capital Amount ratio of 1.89 as of June 2025.

Total gross written premiums reached $46.9b, making Australia the fourth-largest non-life insurance market in Asia-Pacific. 

The sector remains dominated by IAG, Suncorp, QBE and Allianz, whilst challenger brands such as Hollard, Youi and Auto & General continue to expand.

Recent consolidation has reshaped the market, with IAG acquiring RACQ and RAC (pending regulatory approval) and Allianz purchasing RAA’s insurance business. 

IAG also launched a specialist cyber underwriting agency, CYLO, targeting small businesses. Cyber coverage continues to grow, driven by high-profile data breaches and tougher privacy laws.

Commercial lines have entered a softening phase due to new market entrants and stronger competition. 

Financial lines profitability is expected to decline amidst lower premium rates and economic uncertainty, whilst home and motor lines are seeing modest improvement as catastrophe losses ease and reinsurance costs stabilise.

Flood risk and rising construction costs continue to affect household insurance affordability. 

Capacity also remains tight in the strata market due to issues such as building defects and fire risks linked to lithium-ion batteries.

Reinsurance conditions are favourable, with increased capacity, competitive pricing and more facultative placements. 

The Australian Prudential Regulation Authority (APRA) is consulting on changes to capital rules to expand access to alternative risk transfer markets.

Australia’s economic growth slowed to 1.4% in 2024, but insurers remain well-capitalised and are investing in technology, artificial intelligence, and InsurTech partnerships to improve underwriting and claims efficiency.