Australia’s general insurance market is expected to experience steady expansion over the next five years, with total direct written premiums (DWP) projected to reach $144.5 billion by 2029. This follows a compound annual growth rate (CAGR) of 8.8%, according to analysis by data and analytics firm GlobalData.
Rising insurance needs driven by climate-related disasters, inflationary pressures, and growing demand for health coverage are reshaping the sector. In 2025 alone, the industry is forecast to grow to $102.8 billion – an 8.6% increase from the previous year.
“The growth of the general insurance industry in Australia is attributed to the increasing demand for insurance products that cover extreme weather events and rising premium prices due to inflation and the cost-of-living crisis,” said Swarup Kumar Sahoo, GlobalData senior insurance analyst.
“Factors such as heightened health consciousness and the need for comprehensive coverage against natural disasters are expected to support this growth trajectory.”
Personal accident and health (PA&H) insurance remains the dominant segment, expected to account for 33.2% of total DWP in 2025. The segment is projected to grow by 5.3% year-on-year as Australians continue to prioritise private health insurance amid rising medical costs. As of the latest data from Private Healthcare Australia, over 54.9% of Australians hold private health cover.
Changing demographics are also influencing the market, particularly an ageing population. Sahoo noted that insurers are already responding with personalised coverage options and digital health services to meet evolving customer expectations.
The second-largest segment, property insurance, is forecast to hold a 27% share of total premiums in 2025. The segment grew by 14.7% in 2024 and is expected to rise another 13.7% the following year. Contributing factors include higher claims, inflation, and increasing construction costs.
Premiums for home multi-risk insurance – accounting for two-thirds of all property-related net earned premiums—have jumped 65% over the past five years. In addition, infrastructure investments and the transition to renewable energy, aligned with the Australian government’s decarbonisation goals, are expected to further support property insurance growth.
Motor insurance is set to grow at a CAGR of 12.3% between 2025 and 2029. This is attributed to increased vehicle sales, input cost surges, and the market shift toward electric and hybrid vehicles. Since 2019, premiums for comprehensive motor insurance have risen 42%, prompting insurers to adapt policies to new risk profiles.
Other lines – including financial, liability, and marine, aviation, and transit insurance – are expected to make up the remaining 13.4% of the general insurance market in 2025.
Despite the industry’s positive growth outlook, challenges remain.
“Insurers are expected to remain vigilant regarding rising claims costs, inflation, and the impact of climate change while focusing on innovation and customer-centric solutions. The integration of digital technologies and proactive risk management strategies will be crucial in ensuring sustainable growth in this evolving landscape. The expected reciprocal tariff from the US may further raise claims costs and pose a threat to insurers’ profitability,” Sahoo said.
