General insurance industry in Australia to reach $73.6bn in 2026, forecasts GlobalData

The general insurance industry in Australia is projected 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 GlobalData, a leading data, and analytics company.

GlobalData exects strong economic recovery, increasing vehicle sales, and growing demand for natural-catastrophic (nat-cat) policies to support the growth of the Australian general insurance industry during the review period.


Md Shabbir Ansari, Senior Insurance Analyst at GlobalData, comments: “Australian economy is expected to grow by 3.8% in 2021 as compared to a decline of 2.5% in 2020. In line with the economic growth, general insurance industry in Australia grew by 6.7% in 2021 as compared to the 4.0% growth in 2020.”

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

Motor Insurance is the second largest segment, accounting for 24.2% of general insurance DWP in 2021. After slowing down in 2020, the segment grew by 6.0% in 2021, backed by growth in motor vehicles sales, which grew by 14.5%. Motor insurance is expected to grow at a CAGR of 6.4% during 2021-2026.

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 by Liability, Financial lines, Marine, Aviation, and Transit (MAT), and Miscellaneous insurance.

Ansari concludes: “Australian general insurance industry is expected to maintain its positive growth momentum over the next five years driven by strong economic recovery. The profitability of insurers, however, will remain clouded due to escalating losses from increased frequency of natural calamities and rising medical costs.”

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