Insurance Australia Group (IAG) has reported a significant 91% increase in net profit for the first half of the 2025 financial year, reaching $778 million.
This surge is largely attributed to favourable weather conditions and a reduction in claims.
Despite this positive financial performance, IAG's CEO, Nick Hawkins, has indicated that insurance premiums are expected to continue rising, albeit at a slower pace than in previous years.
Mr. Hawkins highlighted that inflationary pressures have significantly impacted both insurers and policyholders, with costs escalating across Australia and New Zealand. He noted that while these pressures are beginning to ease, the cost of reinsurance has "dramatically changed," necessitating further premium adjustments. Reinsurance, which is insurance for insurers, allows companies to share risk globally. The increased cost of reinsurance is a major factor contributing to the rising premiums.
Furthermore, Mr. Hawkins pointed to climate change as a substantial risk affecting the insurance industry. He emphasized the need for proactive measures to strengthen community resilience and mitigate the impacts of severe weather events. This includes reconsidering planning decisions to avoid building in high-risk areas and implementing strategies to enhance the resilience of existing communities.
For real estate professionals, these developments underscore the importance of comprehensive insurance coverage. Rising premiums may affect the cost of insuring properties, making it crucial for agents and property managers to stay informed about market trends and adjust their insurance strategies accordingly. Understanding the factors driving premium increases can aid in making informed decisions to protect assets and ensure compliance with industry standards.
Published:Thursday, 12th Mar 2026 Source: Paige Estritori
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Knowledgebase
Replacement Cost: The amount it would cost to replace or rebuild an insured asset with one of similar kind and quality, without depreciation.
