The Australian general insurance industry is projected to be worth A$123.1 billion (US$83.9 billion) in 2027 in terms of direct written premiums (DWP), according to figures from GlobalData. This figure represents a potential CAGR of 9.1 per cent, up from DWPs of A$86.8 billion in 2023.
This includes annual growth of 9.5 per cent in 2023, and potential growth of 9.8 per cent in 2024 – with key drivers including continued higher awareness of healthcare post-pandemic; rising demand for natural catastrophic (nat-cat) insurance due to climate change; and rising premium rates in the property and motor insurance sectors.
“The Australian general insurance industry has witnessed an upward growth trend since the slowdown in 2020 and grew by 8.1 per cent in 2022, recording the highest growth during the last five years,” said Sutirtha Dutta, Insurance Analyst at GlobalData.
PA&H growth driven by rising healthcare costs
Personal accident and health (PA&H) insurance – the leading line of business in the Australian general insurance industry – accounted for 34.8 per cent of premiums in 2023, and is expected to be a key driver of growth in the Australian insurance industry.
The sector has registered growth for 10 consecutive quarters – with DWPs for PA&H growing by 5.4 per cent in 2022, and 6.4 per cent in 2023. Consequently, around 55 per cent of the Australian population now has private health insurance.
PA&H insurance is expected to grow further, at an average CAGR of six per cent between 2023 and 2027.
Dutta added: “The increasing cost of healthcare due to rising inflation will also support the growth of PA&H insurance. The consumer price index (CPI) inflation in Australia reached 5.2 per cent in August 2023. Rising healthcare costs, which are expected to put an additional burden on uninsured consumers, will support the demand for private health insurance.”