According to financial consultancy firm KPMG's annual review, the average customer paid 19.3% more for home insurance coverage, with premiums rising from $1,070 to $1,277. Car insurance premiums also saw a 12% increase, climbing from $845 to $945. These increases have been a major contributor to the industry's record profits.
The year 2024 was marked by fewer severe weather events, with only two significant incidents: the Valentine's Day storms in Victoria and severe weather in New South Wales and Queensland in April. This reduction in claims allowed insurers to retain more of their premium income, further boosting profitability.
However, this surge in profits has raised concerns among consumers and advocacy groups. Many policyholders have reported steep premium increases with little or no explanation, leading to calls for greater transparency in the industry. Julia Davis from the Financial Rights Legal Centre highlighted that households are facing significant hikes without clear justification, making it difficult for consumers to assess whether they are being charged fair prices.
In response to these concerns, some political leaders have proposed interventions to increase competition within the insurance sector. Opposition leader Peter Dutton suggested that the Coalition could seek to break up insurance companies found to be gouging policyholders, emphasizing the need for more competition to ensure fair pricing.
As the industry continues to navigate the balance between profitability and consumer affordability, it is crucial for insurers to maintain transparency and fairness in their pricing strategies. Policyholders are encouraged to stay informed and explore their options to ensure they receive the best value for their insurance coverage.
