In 2024, the average home insurance premium rose by 19.3% to $1,277, while car insurance premiums increased by 12% to $845. These adjustments reflect insurers' efforts to maintain profitability amid rising claims costs and inflationary pressures.
The year was marked by a relative absence of catastrophic weather events, with only two significant incidents: the Valentine's Day storms in Victoria and severe weather in NSW and Queensland in April. Consequently, insurers faced $566 million in losses from 49,000 claims, a notable decrease from the $2.356 billion paid out across 143,900 claims in 2023.
Investment income also played a crucial role, contributing $3 billion to the total profit, tripling the five-year average. This boost is linked to favorable returns from financial markets during the period.
While the profit surge indicates a return to positive financial performance, it raises concerns about the affordability of insurance for consumers. Without further intervention, premium costs may continue to rise, potentially making insurance unaffordable for many, especially in high-risk areas.
