The general insurance industry in Australia is expected to post its second consecutive year of declining growth, according to estimates from GlobalData.
In its forecast, the data analytics firm projected that the sector will record annual growth of 8.5% in 2025, reaching a value of A$102.8 billion (US$66.7 billion). It also anticipates slower growth of 8.1% the following year, before the growth rate resumes an upward trend, with the industry expected to be valued at A$144.5 billion by 2029.
“This growth will primarily be attributed to the rising demand for personal accident and health (PA&H) insurance, which accounted for 34.2% of total direct written premiums (DWP) in 2024,” noted GlobalData. PA&H insurance remains the largest line of business in Australia and is expected to account for 33.2% of general insurance DWP in 2025.
Rising demand for property and motor insurance, driven by more frequent natural disasters, is also expected to support growth in the general insurance industry.
Australia has been hit by severe weather events this year, including major flooding in New South Wales in May, flooding in North Queensland in February, and ex-Cyclone Alfred in March, which brought floods to eastern Queensland and northern New South Wales. Insurance losses from ex-Cyclone Alfred were estimated by PERILS at A$2.25 billion.
Providing further context on the projection, Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, said: “The growth of the general insurance industry in Australia is attributed to the increasing demand for insurance products that cover extreme weather events, as well as rising premium prices driven by inflation and the cost-of-living crisis.”
“Changes in demographic factors, such as the ageing population, will increase the demand for health insurance and may encourage insurers to enhance their products and services. Insurers in Australia have begun offering digital health solutions and personalised coverage to cater to diverse consumer needs,” Sahoo added.
Positive outlook
GlobalData further said that the outlook for the general insurance industry in Australia remains positive, with insurers expected to remain alert to rising claims costs, inflation, and the effects of climate change, while prioritising innovation and customer-focused solutions.
It added that digitalisation and the integration of proactive risk management strategies are crucial to growing the industry in Australia. However, reciprocal tariffs from the US may lead to higher premium costs, potentially posing a threat to insurers’ profitability.
Reports indicate that Australian Prime Minister Anthony Albanese met with US trade officials on the sidelines of the G7 summit in Canada this week, after his initially scheduled meeting with Donald Trump was cancelled when the American leader left the summit earlier than expected. Australia has emphasised its rich reserves of critical minerals during negotiations with the US, as it pushes for the removal of US tariffs.
