Home insurance premiums rose by 19.3%, with the average policyholder paying $1,277, up from $1,070. Car insurance premiums increased by 12%, averaging $845 compared to $945 previously. These adjustments reflect insurers' efforts to maintain profitability amid rising operational costs and claims.
The year was marked by relatively mild weather conditions, with only two significant events: the Valentine's Day storms in Victoria and severe weather in NSW and Queensland in April. Consequently, insurers faced $566 million in losses from 49,000 claims, a notable decrease from the $2.356 billion paid out across 143,900 claims in 2023.
Scott Guse, KPMG's assurance and risk partner, noted that the absence of major weather catastrophes contributed to the industry's robust financial performance. However, he cautioned that future profits could be impacted if severe weather events occur.
While the profit surge is a positive indicator of the industry's health, it raises concerns about the affordability of insurance for consumers. The Insurance Council of Australia (ICA) has highlighted that without further intervention, premium costs may continue to rise, potentially making insurance unaffordable for many Australians.
For tradespeople and small business owners, these developments underscore the importance of reviewing insurance policies to ensure adequate coverage. Engaging with insurance brokers to explore tailored solutions can help mitigate the impact of rising premiums and ensure comprehensive protection against potential risks.
