Australia general insurance industry to balloon to  $73.6b by 2026

Increased vehicle sales and demand for nat-cat policies helped boost the industry.

The general insurance industry in Australia is predicted to grow at a compound annual growth rate (CAGR) of 6.4% from AUD73.29bn ($54.6bn) in 2021 to AUD99.87bn ($73.6bn) in 2026, in terms of direct written premiums (DWP), according to data, and analytics company GlobalData

GlobalData said it expects a strong economic recovery, with increasing vehicle sales and growing demand for natural catastrophic policies supporting the growth of Australia’s general insurance sector during the review period.

Personal accident and health (PA&H) insurance, which is the largest segment in the Australian general insurance industry, accounts for 36.7% of the DWP in 2021. The PA&H segment, which are mostly sold as riders or additional insurance not covered by the public health insurance system, grew by 0.7% in 2021 against a decline of 0.2% in 2020. PA&H insurance was supported by increase premium rates by the Australian government amidst rising medical costs. The insurance segment is expected to grow at a CAGR 4.5% between 2021 to 2026.

Meanwhile, motor insurance is the second largest segment, which accounted for 24.2% of general insurance DWP in 2021. After a slow down in 2020, the segment shook off its lull by growing by 6% in 2021 on the back of growing motor vehicle sales. This segment is expected to increase by 6.4% between 2021 to 2026.

Property insurance is the third-largest segment with 22.3% share in 2021. The segment grew by 9.5% in 2021, driven by the demand for natural catastrophes policies. Increased number of natural calamities in the last two years, such as hailstorms, bushfire and floods, have prompted insurers to increase the price for these policies. Property insurance is expected to grow at a CAGR of 7.2% during 2021-2026.

The remaining 16.8% share will be accounted for by Liability, Financial lines, Marine, Aviation, and Transit (MAT), and Miscellaneous insurance.