Australia’s non-life insurance industry has shown resilience in the face of an increasingly complex and interconnected risk landscape, with total insurance revenue of approximately A$77.7 billion (US$54.1 billion) in the year to June 30, 2025, according to AM Best.
Best’s market segmentation report “Australian Non-Life Insurance Segments: Leading Growth in a Volatile Environment” shows that Australia’s top ten non-life insurance companies have a combined full-year insurance revenue of nearly A$46 billion in the 2025 financial year, a year-on-year increase of 11.1%.
All 10 insurance companies recorded growth in insurance revenue, with five companies achieving double-digit growth for two consecutive years.
Improvements in profitability and underwriting performance across Australia’s non-life insurance industry last year were driven by the cumulative effect of benign catastrophe losses, strong investment returns and higher premiums across core business lines.
As a result, the non-life division generated pre-tax profits of A$10.5 billion in the 12 months to 30 June 2025.
While annual statistics for FY2024 cannot be compared, the latest results show a significant improvement on the $4.8 billion in profits recorded by direct insurers in the nine-month period to June 2024.
Australia’s non-life insurance segment dominates the market, accounting for 58% of total revenue in FY25.
While reinsurance continues to play a vital role in mitigating large-scale catastrophe risks and supporting market stability, direct insurance accounts for more than 90% of non-life insurance revenue.
The direct non-life segment demonstrated stable underwriting profitability, with net combined ratio remaining below 100% in all four fiscal quarters.
Investment income is also the main driver of insurance profits, the report said.
AM Best financial analyst Chee Yun said: “Non-life insurance companies generally maintain solid investment portfolios, generating a steady stream of investment returns due to the high interest rate environment and strong stock market performance. In fiscal 2025, the total net investment income of the top ten non-life insurance companies increased by 12.7% to nearly A$2.1 billion.”
However, the report pointed out that the ongoing conflict in the Middle East has brought huge uncertainty and risks to the insurance industry.
In response, the Insurance Council of Australia has tasked its most senior industry committees with taking action to strengthen industry support.
This includes looking at how cost inflation and supply chain disruptions may impact policyholders, as well as developing mitigation strategies and ensuring the industry is prepared to respond quickly to customers.
The report also shows that non-life insurance premium growth in key areas has begun to slow; however, affordability pressures remain, prompting the government to focus more on cost management and accessibility.
Cyber insurance is becoming one of the fastest growing specialty product lines in the non-life insurance industry due to the increasing frequency and severity of incidents.
In addition, regulatory oversight continues to increase, with a focus on enhancing the insurance industry’s resilience and adaptability in an increasingly complex risk environment.
