From soaring premiums topping $65 billion to surging cyber claims and the rise of digital-first insurtech, the Australian insurance landscape is navigating unprecedented risks and opportunities as it safeguards over a trillion dollars in assets for millions of policyholders.
Key Takeaways
- In 2022, the Australian general insurance industry's gross written premiums reached $65.4 billion, marking a 5.2% increase from 2021
- The life insurance sector in Australia reported $32.1 billion in in-force premiums as of June 2023, up 3.8% year-on-year
- Health insurance membership stood at 15.2 million Australians in March 2023, representing 57.4% of the population
- General insurance gross incurred claims were $42.3 billion in 2022
- Home building insurance average annual premium was $1,892 in 2023 for metropolitan areas
- Life insurance new business annual premium equivalent (APE) reached $5.6 billion in 2022
- General insurance outstanding claims liabilities stood at $35.1 billion at end-2022
- Natural disaster claims from 2022 floods totaled $4.5 billion across 150,000 claims
- Motor insurance claims frequency was 12.5% in 2022, with average claim size $5,200
- General insurers reported pre-tax profit of $4.2 billion in 2022, ROE 12.1%
- Life insurers' profit after tax was $2.8 billion in 2022, driven by investment income
- Health funds achieved 3.1% operating profit margin in FY2022 on $28.4 billion revenue
- There were 38 authorised general insurers operating in Australia as of December 2022
- 14.8 million Australians held private health insurance hospital cover in March 2023
- Home insurance policies in force numbered 7.2 million in 2022
Australia's insurance industry grew strongly as premiums increased and natural disaster risks rose.
Claims Experience
- General insurance outstanding claims liabilities stood at $35.1 billion at end-2022
- Natural disaster claims from 2022 floods totaled $4.5 billion across 150,000 claims
- Motor insurance claims frequency was 12.5% in 2022, with average claim size $5,200
- Home building claims payouts reached $2.8 billion in 2022, average $15,000 per claim
- Life insurance claims paid out $15.2 billion in 2022, with 98.5% acceptance rate
- Health insurance benefits paid were $25.6 billion in FY2022, covering 4.8 million hospital treatments
- Workers' comp claims averaged $28,000 per claim in 2022, total $5.1 billion paid
- Cyber insurance claims rose 25% to 450 incidents in 2022, payouts $150 million
- CTP personal injury claims settled 85,000 cases in 2022, average $120,000
- Property damage claims from storms hit $1.9 billion in 2022 summer events
- Life insurance death claims numbered 42,000 in 2022, total payout $7.3 billion
- Travel insurance claims post-reopening totaled $450 million for 120,000 claims in 2022
- General insurance claims ratio was 78.2% in 2022, up from 75.1% in 2021
- Health extras claims averaged $1,200 per policyholder in 2022
- Public liability claims frequency increased 4% to 9.8% in 2022
- Professional indemnity claims payouts were $1.2 billion for 8,500 claims in 2022
- Directors and officers insurance claims averaged $450,000 per claim in 2022
- NSW CTP lifetime care claims provision $15 billion cumulative
- Hailstorm claims in 2022 totaled $850 million from March event
- TPD claims payouts $3.2 billion for 12,500 claims in 2022 life insurance
- Dental claims under health insurance $6.8 billion in FY2022
- Bicycle insurance claims 15,000 totaling $25 million in 2022
- Flood claims ratio peaked at 85% in disaster-prone regions 2022
- Life insurance trauma claims 18,000 paid $2.1 billion in 2022
- Hospital episode claims under PHI 2.1 million in Q4 2022
- Product liability claims averaged $75,000 per incident in 2022
- Mental health claims in life insurance up 18% to 4,200 in 2022
- General insurance claims settlement time averaged 45 days in 2022
- Victoria TAC scheme claims $3.9 billion paid in 2022
- Extras benefits claims ratio 72% for health funds in 2022
- Directors liability claims 2,100 cases totaling $280 million in 2022
Claims Experience Interpretation
While Australia's insurers remain admirably diligent—paying out over $35 billion in liabilities and accepting 98.5% of life claims—it appears the nation is collectively engaged in a costly, multi-front war against nature, misfortune, and our own motor vehicles, with our homes, health, and cyber security serving as the frequent battlefields.
Market Overview
- In 2022, the Australian general insurance industry's gross written premiums reached $65.4 billion, marking a 5.2% increase from 2021
- The life insurance sector in Australia reported $32.1 billion in in-force premiums as of June 2023, up 3.8% year-on-year
- Health insurance membership stood at 15.2 million Australians in March 2023, representing 57.4% of the population
- Total insurance industry assets under management exceeded $1.2 trillion in 2022, with general insurers holding $120 billion
- The Australian insurance market grew at a CAGR of 4.1% from 2018 to 2022, driven by rising natural disaster risks
- In 2023, compulsory third-party (CTP) insurance premiums totaled $4.8 billion across states
- Reinsurance dependency in Australia saw ceded premiums of $15.7 billion in 2022 for general insurance
- The insurtech sector attracted $450 million in investments in 2022, boosting digital insurance adoption
- Workers' compensation insurance premiums hit $7.2 billion in FY2022
- Cyber insurance premiums grew 28% to $250 million in 2022 amid rising threats
- APRA regulates 38 general, 27 life, and 32 health insurers as of 2023
- Insurance Contracts Act (AASB 17) implementation began 1 July 2023 for all insurers
- ICA membership covers 95% of general insurance premiums in Australia
- Foreign reinsurers dominate with 80% market share in catastrophe reinsurance
- Basel III capital requirements strengthened insurer solvency from 2023
- Digital claims processing reached 65% of total claims in 2022
- Gender pay gap in insurance industry at 22% as of 2022 ABS data
- Climate risk disclosures mandatory under APRA CPS 229 from 2022
- Insurtech startups numbered 120 in Australia by 2023
- Parametric insurance products grew 15% in adoption for disasters in 2022
Market Overview Interpretation
Even as Australians fortify themselves with over a trillion dollars in coverage against a rising tide of disasters and digital threats, the industry’s own vulnerabilities—from a stubborn gender pay gap to heavy reliance on foreign reinsurers—reveal that the business of security is still a work in progress.
Policyholders and Coverage
- There were 38 authorised general insurers operating in Australia as of December 2022
- 14.8 million Australians held private health insurance hospital cover in March 2023
- Home insurance policies in force numbered 7.2 million in 2022
- Life insurance policies covered 18.5 million lives in 2022
- Motor insurance policies totaled 11.4 million in 2022
- 2.3 million policies for contents insurance were active in 2022
- Workers' compensation covered 4.8 million workers in 2022
- Pet insurance policies grew to 450,000 in 2022, up 22%
- Cyber insurance policies issued numbered 25,000 for SMEs in 2022
- Travel insurance policies sold 3.2 million in 2022
- CTP insurance policies active 10.5 million vehicles in 2022
- Business insurance policies covered 1.2 million SMEs in 2022
- Disability income policies in force 1.8 million in 2022
- Public liability policies numbered 850,000 for community groups in 2022
- Professional indemnity policies for accountants reached 120,000 in 2022
- Strata schemes policies 550,000 in 2022 NSW alone
- Superannuation death benefit insurance policies 12 million lives covered 2022
- SME cyber policies 18,000 new in 2022
- Landlord insurance policies 1.1 million nationally 2022
- TPD cover policies 9.5 million in super funds 2022
- Hospital cash benefit policies under health 2.8 million 2022
- Commercial property policies 420,000 in 2022
- Funeral insurance policies declined to 1.2 million in 2022
Policyholders and Coverage Interpretation
Despite the reassuring hum of nearly 40 insurers and a thicket of policies protecting everything from our pets to our accountants, these figures ultimately sketch a portrait of a nation anxiously negotiating its daily gambles with fate, finance, and faulty wiring.
Premium Income
- General insurance gross incurred claims were $42.3 billion in 2022
- Home building insurance average annual premium was $1,892 in 2023 for metropolitan areas
- Life insurance new business annual premium equivalent (APE) reached $5.6 billion in 2022
- Private health insurance average single adult premium increased 3.2% to $1,856 per year in 2023
- Motor vehicle insurance gross written premiums totaled $12.4 billion in 2022, up 6.1%
- Travel insurance premiums surged 45% to $1.2 billion post-COVID in 2022
- Property insurance premiums for commercial lines grew 7.3% to $8.9 billion in 2022
- Disability income insurance premiums were $2.1 billion in 2022 for the life sector
- CTP green slip premiums averaged $450 in NSW for 2023, varying by vehicle type
- Pet insurance premiums reached $320 million in 2022, with 20% growth
- General insurance net earned premiums after reinsurance were $48.2 billion in 2022
- Term life insurance average premium for $500k cover was $45/month for a 35-year-old male in 2023
- Liability insurance premiums increased 9.2% to $3.5 billion in 2022
- Health fund community rating premium increases averaged 2.9% for 2023
- Fire and peril insurance premiums were $6.7 billion in 2022
- Business interruption insurance uptake rose, premiums at $1.8 billion in 2022
- Home contents average premium $350/year in regional Australia 2023
- Commercial motor premiums averaged $4,500 per policy in 2022
- Trauma insurance premiums totaled $900 million in 2022 life sector
- Family health insurance average premium $4,200 annually in 2023
- Strata insurance premiums rose 12% to $1.1 billion in 2022
- Income protection premiums $1.4 billion in 2022
- Marine insurance premiums $650 million for cargo in 2022
- Landlords insurance policies premiums $420 million in 2022
- Group life insurance premiums $8.2 billion in superannuation funds 2022
- Queensland CTP premiums averaged $380 for light vehicles 2023
- Aviation insurance premiums $180 million in 2022
- Critical illness cover average premium $120/month for $200k benefit 2023
- General insurance reinsurance expense ratio 22.4% in 2022
Premium Income Interpretation
In the grand, slightly alarming tapestry of Australian insurance, we are collectively paying a small fortune to protect everything from our homes and health to our pets and parcels, revealing a society that is increasingly risk-averse yet constantly reminded that security comes at a rising and multifaceted cost.
Profitability and Financials
- General insurers reported pre-tax profit of $4.2 billion in 2022, ROE 12.1%
- Life insurers' profit after tax was $2.8 billion in 2022, driven by investment income
- Health funds achieved 3.1% operating profit margin in FY2022 on $28.4 billion revenue
- Insurance Australia Group (IAG) posted $1.1 billion net profit for FY2022
- Suncorp Insurance profit before tax $1.2 billion in 2022
- QBE Australia management ROE was 14.5% in 2022
- General insurance combined operating ratio improved to 92.3% in 2022 from 95.1%
- Investment yield for general insurers averaged 2.8% in 2022
- TAL Life net profit $450 million in FY2022
- Healthscope fund solvency ratio averaged 220% in 2022, exceeding requirements
- Reinsurance recoverables net of provisions $12.4 billion at end-2022
- AMP Life insurance profit $320 million in 2022
- General insurance expense ratio was 28.5% in 2022
- Vero Insurance (Suncorp) underwriting profit $800 million in 2022
- NRMA Insurance catastrophe claims $1.4 billion from 2022 events
- Allianz Australia underwriting margin 8.2% in 2022
- nib health funds profit $180 million in FY2022
- General insurance capital adequacy ratio averaged 1.8x PCA in 2022
- Investment income for life insurers $4.1 billion in 2022
- Medibank private profit $601 million in FY2022
- Insurance Australia Group expense ratio 30.1% in FY2022
- Suncorp Group insurance trading result $1.04 billion FY2022
- General insurers' liquidity coverage ratio 145% in 2022
- AIA Australia profit contribution $250 million in 2022
- Health funds management expenses 12.3% of revenue in FY2022
- Vero catastrophe experience added $300 million to profit in 2022
- Life insurance lapse rates averaged 8.2% in 2022, impacting profitability
- Bupa Australia EBITDA $420 million FY2022
Profitability and Financials Interpretation
After sifting through the profit bonanzas and capital cushions, the Australian insurance industry appears fundamentally robust, yet its prosperity seems curiously tethered to customers not claiming, investments performing, and catastrophes, rather inconveniently, not occurring.
Sources & References
- Reference 1APRAapra.gov.auVisit source
- Reference 2PRIVATEHEALTHprivatehealth.gov.auVisit source
- Reference 3IBISWORLDibisworld.comVisit source
- Reference 4INSURANCECOUNCILinsurancecouncil.com.auVisit source
- Reference 5FINTECHNEWSfintechnews.com.auVisit source
- Reference 6SAFEWORKsafework.nsw.gov.auVisit source
- Reference 7KPMGkpmg.comVisit source
- Reference 8CHOICEchoice.com.auVisit source
- Reference 9PWCpwc.com.auVisit source
- Reference 10SIRAsira.nsw.gov.auVisit source
- Reference 11ROYMORGANroymorgan.comVisit source
- Reference 12FINDERfinder.com.auVisit source
- Reference 13DELOITTEdeloitte.comVisit source
- Reference 14SAFEWORKAUSTRALIAsafeworkaustralia.gov.auVisit source
- Reference 15FINANCIALSERVICESCOUNCILfinancialservicescouncil.com.auVisit source
- Reference 16IAGiag.com.auVisit source
- Reference 17SUNCORPGROUPsuncorpgroup.com.auVisit source
- Reference 18QBEqbe.comVisit source
- Reference 19TALtal.com.auVisit source
- Reference 20AMPamp.com.auVisit source
- Reference 21ABSabs.gov.auVisit source
- Reference 22QLDqld.gov.auVisit source
- Reference 23TACtac.vic.gov.auVisit source
- Reference 24ALLIANZallianz.com.auVisit source
- Reference 25NIBnib.com.auVisit source