Australian Insurance Sector Achieves Robust Profits in 2024

In the general insurance segment, insurance revenue increased to $19.2 billion, up from $18.6 billion in the previous quarter. Despite higher claims and operational costs leading to service expenses of $13.9 billion, the sector achieved a solid insurance service result of $2.2 billion. This performance was primarily driven by short-tail property classes and inwards reinsurance. Net profit after tax rose to $2.08 billion, bolstered by investment returns of $1.84 billion. The industry's return on net assets improved to 5.4%, indicating enhanced financial health.

The life insurance sector also experienced a notable turnaround. Insurance revenue reached $6.18 billion, with service expenses at $5.43 billion. The insurance service result climbed to $638 million, marking a significant improvement from the previous year. The sector reported a net profit after tax of $459 million, a substantial recovery from a $443 million loss in the prior year. Strong investment returns of $2.7 billion contributed to this positive outcome. Total assets grew to $136.2 billion, with a capital coverage ratio of 2.15, reflecting increased stability.

Private health insurance maintained its positive trajectory, with insurance revenue rising to $8.23 billion in the December quarter. Service expenses increased to $7.68 billion due to escalating healthcare costs. Despite these challenges, insurers remained profitable, recording a service result of $518 million and a net profit of $581 million, slightly down from $627 million in the previous quarter.

These robust financial results across all insurance sectors underscore the industry's resilience and adaptability in the face of rising costs and operational challenges. The positive performance provides a solid foundation for insurers to continue offering comprehensive coverage to Australians while navigating the evolving risk landscape.