Insurance Australia Group and QBE Insurance Group are continuing to benefit from higher premiums as Australia’s insurance industry works through years of rising claims costs.
The pressure has come from several areas. Natural disasters have led to more claims, while supply chain issues and higher building costs have made repairs more expensive. In response, insurers have been lifting premiums to better reflect those costs and protect their margins. That repricing cycle is still playing out.
IAG chief executive Nick Hawkins said at the company’s half-year results that the group expects high single-digit premium growth for FY2026. Its Australian retail business reported 14.4% top-line growth in the first half.
QBE has also seen premium growth continue into the new year. The insurer reported double-digit premium growth in the first quarter of 2026, after gross written premium rose 7% in constant currency across FY2025. The increase was driven by targeted growth in its North American and International divisions.
For IAG, the latest financial reporting period was mixed. The company reported statutory net profit after tax of $505 million, down 35% from a year earlier. The fall was mainly due to a $174 million weather impact from the newly acquired RACQI portfolio, which had not yet been included in IAG’s comprehensive reinsurance programme before January 2026.
Even with that hit, IAG’s core insurance result improved. Underlying insurance profit rose 7.6% to $804 million, while its margin stayed at 15.1%. The company kept its FY2026 insurance profit guidance at $1.55 billion to $1.75 billion.
The company also announced an on-market share buyback of up to $200 million. It is still facing legal uncertainty linked to an upcoming Greensill court case, with $432 million set aside for legal fees and claims handling. The company said it expects no net exposure.
Meanwhile, QBE’s latest full-year result showed a clearer earnings improvement. The insurer reported statutory net profit after tax of US$2.16 billion for FY2025, up 21% from the previous year.
Its combined operating ratio improved to 91.9%, which suggests it is earning more from its insurance business after claims and costs. QBE also declared a full-year dividend of $1.09 per share, up 25% from the prior year, while keeping its payout ratio at 50%.
Unlike IAG, QBE operates across 27 countries, giving it a wider spread of business across Australia, North America, and other international markets.
