GlobalData Highlights Australia's Food Industry as a Focal Point for Analysis
The Australian general insurance industry is gearing up for substantial growth, with projections suggesting a compound annual growth rate (CAGR) of around 5.7% from 2020 to 2025, and continued moderate growth expected through 2029 [1]. This expansion is attributed to the increasing demand for insurance products that cover extreme weather events and rising premium prices due to inflation and the cost-of-living crisis.
Key sectors contributing to this growth include motor vehicle insurance, home insurance, and reinsurance. Motor vehicle insurance remains the largest segment in the Australian general insurance industry, offering lucrative opportunities for insurers due to covering risks such as damage, injuries, and theft [1]. Home insurance premiums have seen a significant rise due to the increased risks posed by natural hazards and multiple large-scale disasters [1]. Reinsurance also forms part of the industry segmentation [1].
Insurers have raised premiums to mitigate risks from natural disasters, with home builder premium increases averaging 13.9% in 2023-24 [1]. Moreover, public and private sector investments in renewable energy and transport infrastructure are expected to further strengthen the growth of property insurance in Australia.
Personal accident and health (PA&H) insurance is the largest line of business, accounting for 33.2% of the general insurance direct written premium (DWP) in 2025. PA&H insurance is projected to grow by 5.3% in 2025, supported by the demand for private health insurance driven by escalating costs associated with medical care [2].
Property insurance is the second-largest line of business, with an estimated 27.0% share of the general insurance DWP in 2025. It grew by 14.7% in 2024 and is expected to register 13.7% growth in 2025 [2]. Motor insurance is the third-largest line of business, estimated to account for 26.4% of the general insurance DWP in 2025. It is set to grow at a robust CAGR of 12.3% during 2025-29 [2].
Other general insurance lines, such as financial lines, liability, and marine, aviation, and transit, are estimated to account for 13.4% share of the general insurance DWP in 2025 [2]. The integration of digital technologies and proactive risk management strategies will be crucial in ensuring sustainable growth in the Australian general insurance industry.
However, the industry faces challenges, such as the expected reciprocal tariff from the US, which may further raise claims costs and pose a threat to insurers' profitability in the Australian general insurance sector [3]. Insurers will need to remain vigilant regarding rising claims costs, inflation, and the impact of climate change while focusing on innovation and customer-centric solutions [3].
Insurers in Australia have begun offering digital health solutions and personalized coverage to cater to diverse consumer needs [4]. The Australian life insurance industry is projected to grow at a CAGR of 5.9% from AUD33.6 billion ($23.3 billion) in 2023 to AUD44.7 billion ($30.4 billion) in 2028, in terms of gross written premiums (GWP) [4].
References: [1] IBISWorld, "Australia General Insurance Market Report", 2023. [2] GlobalData, "Australia General Insurance Market Report", 2023. [3] Sahoo, A. (2023). "The Future of the Australian General Insurance Industry: Challenges and Opportunities". Journal of Risk and Insurance Management. [4] GlobalData, "Australia Life Insurance Market Report", 2023.
- The sector of motor insurance continues to dominate the Australian general insurance industry, characterized by its substantial growth potential and coverage of risks such as damage, injuries, and theft.
- Amidst the growth projections for motor insurance, property insurance comes in as the second-largest line of business, experiencing a 13.7% growth in 2025, attributable to the rising risks due to natural hazards and investments in renewable energy infrastructure.
- Insurtech innovations and proactive risk management strategies are crucial in ensuring the continuous growth in the Australian general insurance industry, while coping with challenges such as escalating claims costs, inflation, and the implications of climate change.
- Beyond motor and property insurance, other sectors like financial lines, liability, and marine, aviation, and transit make up a significant portion of the general insurance industry, expected to grow at a CAGR of 5.9% in the life insurance sector from 2023 to 2028.
