Australia’s general insurance industry posted significantly improved earnings in 2024, supported by lower natural disaster claims, increases in premium rates, and favourable returns on investments, according to KPMG’s General Insurance Insights report.
Profit after tax across the sector totalled $6.1 billion, up from the five-year average of $2 billion. Insurance profit excluding investment income stood at $3.1 billion, while investment income, after taxes, contributed $3.0 billion – nearly three times the historical average.
KPMG attributed the gains to:
Natural catastrophe-related losses were substantially reduced in 2024, reaching $566 million compared to $2.36 billion in the prior year.
The industry recorded only two major weather-related incidents – February’s storms in Victoria and April’s severe weather in New South Wales and Queensland – resulting in 49,000 claims. This was significantly lower than the 143,900 claims recorded in 2023.
Scott Guse, partner at KPMG Australia, highlighted the significance of these results.
“In today’s cost-of-living crisis, it remains important to acknowledge the cyclical nature of the insurance market and appreciate that premium price increases are reflective of pricing for increased disaster risk, inflationary pressures, increased costs of reinsurance, and supply-chain shortages. A collaborative approach between the insurance industry, government, and communities is needed to maintain an affordable and accessible insurance market for all Australians,” he said.
Gross written premiums increased to $68 billion in 2024, from $65.5 billion a year earlier. Average premiums for householders’ insurance rose to $1,277, while those for motor vehicle insurance climbed to $946.
The industry’s capital adequacy ratio also improved slightly, standing at 1.82 times the regulatory minimum by year-end.
Technology investment remains a key strategic focus. Many insurers have accelerated the integration of artificial intelligence to streamline claims handling, enhance customer experiences, and refine underwriting processes. AI adoption is also extending into risk modelling and climate forecasting.
KPMG’s national sector leader for insurance, David Akers, observed that this digital transition is reshaping how insurers operate.
“KPMG’s general insurance insights explore the top trends that we believe are important to the sector for 2025,” he said. “These priorities feature heavily in our top trends for the Australian general insurance market for 2025 and beyond.”
The regulatory landscape also evolved in 2024, with the implementation of new requirements including CPS 230, AASB 17, and the Financial Accountability Regime. These changes prompted insurers to increase investments in compliance infrastructure and operational resilience.
Cybersecurity continues to present complex risks for insurers. The emergence of advanced threats – particularly those using AI-driven technologies – has led to increased scrutiny of cyber insurance offerings, which remain difficult to price and limited in availability across the Australian market.
In parallel, insurers are responding to new environmental, social, and governance (ESG) expectations.
With Australia’s sustainability reporting standards now in place, large entities will begin reporting climate-related financial disclosures from December 2025. Preparations are underway across the industry to meet these new obligations.
Future growth expectations remain optimistic. According to GlobalData, Australia’s general insurance market is projected to grow at a compound annual rate of 9.2%, with direct written premiums forecast to rise from $103.1 billion in 2025 to $146.9 billion by 2029.
Analysts link this growth to increased demand for disaster protection, inflation-driven premium adjustments, and continued recovery in the broader economy.
Sneha Verma, a senior analyst at GlobalData, noted that heightened awareness of health and climate-related risks continues to drive the sector’s expansion.
