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
1General insurance outstanding claims liabilities stood at $35.1 billion at end-2022
Verified2Natural disaster claims from 2022 floods totaled $4.5 billion across 150,000 claims
Verified3Motor insurance claims frequency was 12.5% in 2022, with average claim size $5,200
Verified4Home building claims payouts reached $2.8 billion in 2022, average $15,000 per claim
Directional5Life insurance claims paid out $15.2 billion in 2022, with 98.5% acceptance rate
Single source6Health insurance benefits paid were $25.6 billion in FY2022, covering 4.8 million hospital treatments
Verified7Workers' comp claims averaged $28,000 per claim in 2022, total $5.1 billion paid
Verified8Cyber insurance claims rose 25% to 450 incidents in 2022, payouts $150 million
Verified9CTP personal injury claims settled 85,000 cases in 2022, average $120,000
Directional10Property damage claims from storms hit $1.9 billion in 2022 summer events
Single source11Life insurance death claims numbered 42,000 in 2022, total payout $7.3 billion
Verified12Travel insurance claims post-reopening totaled $450 million for 120,000 claims in 2022
Verified13General insurance claims ratio was 78.2% in 2022, up from 75.1% in 2021
Verified14Health extras claims averaged $1,200 per policyholder in 2022
Directional15Public liability claims frequency increased 4% to 9.8% in 2022
Single source16Professional indemnity claims payouts were $1.2 billion for 8,500 claims in 2022
Verified17Directors and officers insurance claims averaged $450,000 per claim in 2022
Verified18NSW CTP lifetime care claims provision $15 billion cumulative
Verified19Hailstorm claims in 2022 totaled $850 million from March event
Directional20TPD claims payouts $3.2 billion for 12,500 claims in 2022 life insurance
Single source21Dental claims under health insurance $6.8 billion in FY2022
Verified22Bicycle insurance claims 15,000 totaling $25 million in 2022
Verified23Flood claims ratio peaked at 85% in disaster-prone regions 2022
Verified24Life insurance trauma claims 18,000 paid $2.1 billion in 2022
Directional25Hospital episode claims under PHI 2.1 million in Q4 2022
Single source26Product liability claims averaged $75,000 per incident in 2022
Verified27Mental health claims in life insurance up 18% to 4,200 in 2022
Verified28General insurance claims settlement time averaged 45 days in 2022
Verified29Victoria TAC scheme claims $3.9 billion paid in 2022
Directional30Extras benefits claims ratio 72% for health funds in 2022
Single source31Directors liability claims 2,100 cases totaling $280 million in 2022
VerifiedClaims 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
1In 2022, the Australian general insurance industry's gross written premiums reached $65.4 billion, marking a 5.2% increase from 2021
Verified2The life insurance sector in Australia reported $32.1 billion in in-force premiums as of June 2023, up 3.8% year-on-year
Verified3Health insurance membership stood at 15.2 million Australians in March 2023, representing 57.4% of the population
Verified4Total insurance industry assets under management exceeded $1.2 trillion in 2022, with general insurers holding $120 billion
Directional5The Australian insurance market grew at a CAGR of 4.1% from 2018 to 2022, driven by rising natural disaster risks
Single source6In 2023, compulsory third-party (CTP) insurance premiums totaled $4.8 billion across states
Verified7Reinsurance dependency in Australia saw ceded premiums of $15.7 billion in 2022 for general insurance
Verified8The insurtech sector attracted $450 million in investments in 2022, boosting digital insurance adoption
Verified9Workers' compensation insurance premiums hit $7.2 billion in FY2022
Directional10Cyber insurance premiums grew 28% to $250 million in 2022 amid rising threats
Single source11APRA regulates 38 general, 27 life, and 32 health insurers as of 2023
Verified12Insurance Contracts Act (AASB 17) implementation began 1 July 2023 for all insurers
Verified13ICA membership covers 95% of general insurance premiums in Australia
Verified14Foreign reinsurers dominate with 80% market share in catastrophe reinsurance
Directional15Basel III capital requirements strengthened insurer solvency from 2023
Single source16Digital claims processing reached 65% of total claims in 2022
Verified17Gender pay gap in insurance industry at 22% as of 2022 ABS data
Verified18Climate risk disclosures mandatory under APRA CPS 229 from 2022
Verified19Insurtech startups numbered 120 in Australia by 2023
Directional20Parametric insurance products grew 15% in adoption for disasters in 2022
Single sourceMarket 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
1There were 38 authorised general insurers operating in Australia as of December 2022
Verified214.8 million Australians held private health insurance hospital cover in March 2023
Verified3Home insurance policies in force numbered 7.2 million in 2022
Verified4Life insurance policies covered 18.5 million lives in 2022
Directional5Motor insurance policies totaled 11.4 million in 2022
Single source62.3 million policies for contents insurance were active in 2022
Verified7Workers' compensation covered 4.8 million workers in 2022
Verified8Pet insurance policies grew to 450,000 in 2022, up 22%
Verified9Cyber insurance policies issued numbered 25,000 for SMEs in 2022
Directional10Travel insurance policies sold 3.2 million in 2022
Single source11CTP insurance policies active 10.5 million vehicles in 2022
Verified12Business insurance policies covered 1.2 million SMEs in 2022
Verified13Disability income policies in force 1.8 million in 2022
Verified14Public liability policies numbered 850,000 for community groups in 2022
Directional15Professional indemnity policies for accountants reached 120,000 in 2022
Single source16Strata schemes policies 550,000 in 2022 NSW alone
Verified17Superannuation death benefit insurance policies 12 million lives covered 2022
Verified18SME cyber policies 18,000 new in 2022
Verified19Landlord insurance policies 1.1 million nationally 2022
Directional20TPD cover policies 9.5 million in super funds 2022
Single source21Hospital cash benefit policies under health 2.8 million 2022
Verified22Commercial property policies 420,000 in 2022
Verified23Funeral insurance policies declined to 1.2 million in 2022
VerifiedPolicyholders 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
1General insurance gross incurred claims were $42.3 billion in 2022
Verified2Home building insurance average annual premium was $1,892 in 2023 for metropolitan areas
Verified3Life insurance new business annual premium equivalent (APE) reached $5.6 billion in 2022
Verified4Private health insurance average single adult premium increased 3.2% to $1,856 per year in 2023
Directional5Motor vehicle insurance gross written premiums totaled $12.4 billion in 2022, up 6.1%
Single source6Travel insurance premiums surged 45% to $1.2 billion post-COVID in 2022
Verified7Property insurance premiums for commercial lines grew 7.3% to $8.9 billion in 2022
Verified8Disability income insurance premiums were $2.1 billion in 2022 for the life sector
Verified9CTP green slip premiums averaged $450 in NSW for 2023, varying by vehicle type
Directional10Pet insurance premiums reached $320 million in 2022, with 20% growth
Single source11General insurance net earned premiums after reinsurance were $48.2 billion in 2022
Verified12Term life insurance average premium for $500k cover was $45/month for a 35-year-old male in 2023
Verified13Liability insurance premiums increased 9.2% to $3.5 billion in 2022
Verified14Health fund community rating premium increases averaged 2.9% for 2023
Directional15Fire and peril insurance premiums were $6.7 billion in 2022
Single source16Business interruption insurance uptake rose, premiums at $1.8 billion in 2022
Verified17Home contents average premium $350/year in regional Australia 2023
Verified18Commercial motor premiums averaged $4,500 per policy in 2022
Verified19Trauma insurance premiums totaled $900 million in 2022 life sector
Directional20Family health insurance average premium $4,200 annually in 2023
Single source21Strata insurance premiums rose 12% to $1.1 billion in 2022
Verified22Income protection premiums $1.4 billion in 2022
Verified23Marine insurance premiums $650 million for cargo in 2022
Verified24Landlords insurance policies premiums $420 million in 2022
Directional25Group life insurance premiums $8.2 billion in superannuation funds 2022
Single source26Queensland CTP premiums averaged $380 for light vehicles 2023
Verified27Aviation insurance premiums $180 million in 2022
Verified28Critical illness cover average premium $120/month for $200k benefit 2023
Verified29General insurance reinsurance expense ratio 22.4% in 2022
DirectionalPremium 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
1General insurers reported pre-tax profit of $4.2 billion in 2022, ROE 12.1%
Verified2Life insurers' profit after tax was $2.8 billion in 2022, driven by investment income
Verified3Health funds achieved 3.1% operating profit margin in FY2022 on $28.4 billion revenue
Verified4Insurance Australia Group (IAG) posted $1.1 billion net profit for FY2022
Directional5Suncorp Insurance profit before tax $1.2 billion in 2022
Single source6QBE Australia management ROE was 14.5% in 2022
Verified7General insurance combined operating ratio improved to 92.3% in 2022 from 95.1%
Verified8Investment yield for general insurers averaged 2.8% in 2022
Verified9TAL Life net profit $450 million in FY2022
Directional10Healthscope fund solvency ratio averaged 220% in 2022, exceeding requirements
Single source11Reinsurance recoverables net of provisions $12.4 billion at end-2022
Verified12AMP Life insurance profit $320 million in 2022
Verified13General insurance expense ratio was 28.5% in 2022
Verified14Vero Insurance (Suncorp) underwriting profit $800 million in 2022
Directional15NRMA Insurance catastrophe claims $1.4 billion from 2022 events
Single source16Allianz Australia underwriting margin 8.2% in 2022
Verified17nib health funds profit $180 million in FY2022
Verified18General insurance capital adequacy ratio averaged 1.8x PCA in 2022
Verified19Investment income for life insurers $4.1 billion in 2022
Directional20Medibank private profit $601 million in FY2022
Single source21Insurance Australia Group expense ratio 30.1% in FY2022
Verified22Suncorp Group insurance trading result $1.04 billion FY2022
Verified23General insurers' liquidity coverage ratio 145% in 2022
Verified24AIA Australia profit contribution $250 million in 2022
Directional25Health funds management expenses 12.3% of revenue in FY2022
Single source26Vero catastrophe experience added $300 million to profit in 2022
Verified27Life insurance lapse rates averaged 8.2% in 2022, impacting profitability
Verified28Bupa Australia EBITDA $420 million FY2022
VerifiedProfitability 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