Insurance Sector Reports $1 Billion Profit Amidst Household Strain

1

Short-tail property categories – including householders, commercial motor, domestic motor, and fire and industrial special risks – contributed an underwriting profit of $271 million. Although this figure represents a decline from the previous quarter's $1 billion, it surpasses last year's $192 million. Notably, householders were the only sector within short-tail properties to post an underwriting loss, with a $190 million deficit, following three continuous quarters of gains.

According to Tim Yip, Director at Taylor Fry, the general insurance industry has delivered a robust outcome overall. Despite the apparent setback in the householders' line, this is consistent with expectations due to seasonal patterns. The March and December quarters typically pose challenges because of cyclone season, spanning November to April, alongside other severe weather risks. The March quarter accounted for damages from Ex-Tropical Cyclone Alfred, resulting in an industry-wide cost exceeding $1.2 billion.

Even with the March-quarter downturn, the year-to-date underwriting result for householders remains positive, tallying a $443 million profit, Yip noted. Remarkably, the December quarter's underwriting profit of $217 million was the first positive performance during that time frame in six years.

Scott Duncan, Principal at Taylor Fry, highlighted that average householders' insurance rates rose by 11% over the year to March, following a 20% hike in the previous year. He emphasized that despite the overarching figures, granular pricing adjustments mean some properties face more pronounced cost pressures. Thus, issues of affordability and accessibility persist.

This financial report underscores both the resilience of the insurance sector and the ongoing economic strain felt in household coverage, with consumer costs remaining a focal point for potential improvements and strategic adjustments in the forthcoming months.

Published:Wednesday, 11th Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

AFCA Upholds Insurance Fraud Ruling Over Disputed Possum Accident 26 Jun 2025: Paige Estritori A motorist's claim that he crashed into a tree to avoid a possum has been denied by the Australian Financial Complaints Authority (AFCA), which supported the insurer's fraud decision. The incident involved the driver crashing his Jeep—insured for over $20,000—on a dimly-lit street, purportedly avoiding the rain-soaked motorway en route to the store. - read more

Code Watchdog Criticises Insurer for Misleading Rejection Letters 24 Jun 2025: Paige Estritori The Life Code Compliance Committee has recently reprimanded a life insurance provider for issuing misleading rejection letters to policy applicants. These letters were deemed 'ambiguous and contradictory' and failed to clearly inform applicants of their review options after being denied coverage. - read more

Insurer Ordered to Pay Full Claim for Confusing Patio Coverage 23 Jun 2025: Paige Estritori A recent ruling mandates that an insurer must fully honor a storm-related claim due to ambiguous policy wording regarding items in open areas. The Australian Financial Complaints Authority (AFCA) determined that the insurer's restriction on coverage for items in a patio area was unfounded, as the policy's phrasing was not clear. - read more

Australia Sees Dramatic Drop in Catastrophe Losses 23 Jun 2025: Paige Estritori Last year saw Australia's insured catastrophe losses plummet to just $500 million, marking the lowest level since 2004, according to Aon's latest Climate and Catastrophe Insight report. Notably, the Insurance Council of Australia reported no disasters for the year, a situation not seen since 1982. This comes in stark contrast to 2023, when disaster-related insured losses soared to over $3.6 billion. - read more

Half a Million Australian Homes at Risk of Becoming Uninsurable, Climate Agency Reports 21 Jun 2025: Paige Estritori The Climate Change Authority has released a concerning report highlighting that, without immediate intervention, extreme natural hazards could cost Australians approximately $8.7 billion annually by 2050. The report urges the federal government to spearhead a comprehensive and well-coordinated national adaptation agenda to mitigate these risks. - read more