Australia’s non-life insurance industry has demonstrated resilience in the face of an increasingly complex and interconnected risk landscape, achieving total insurance revenue of approximately AUD 77.7 billion (USD 54.1 billion) for the fiscal year ending 30 June 2025, according to AM Best.
The top 10 Australia-based non-life insurers reported a combined full-year insurance revenue of nearly AUD 46 billion in fiscal year 2025, marking an increase of 11.1% year over year, the Best’s Market Segment Report, “Australia’s Non-Life Insurance Segment: Navigating Growth in a Volatile Landscape,” revealed.
All 10 recorded insurance revenue growth, including five with two consecutive years of double-digit gains.
The improved profitability and underwriting performance seen last year across Australia’s entire non-life industry were driven by benign catastrophe losses, strong investment returns and the cumulative effect of premium rate increases across core business lines.
As a result, the non-life segment generated AUD 10.5 billion in profit before tax in the 12 months ending 30 June 2025.
While annual statistics for fiscal year 2024 are unavailable for comparison, the latest results marked a sharp improvement from the AUD 4.8 billion profits recorded by direct insurers over the previous nine-month period to June 2024.
Australia’s non-life insurance segment dominates the market, contributing 58% of total revenue in fiscal year 2025.
Direct insurance accounts for over 90% of non-life revenue, though reinsurance continues to play a vital role in mitigating large-scale catastrophe risks and supporting market stability.
The direct non-life segment showed consistent underwriting profitability, with its net combined ratio staying under 100% across all four fiscal quarters.
According to the report, investment income was also a key driver of insurance earnings.
“Non-life insurers generally maintain a robust investment portfolio, generating a steady stream of investment returns due to the high-interest rate environment and strong equity market performance. The top 10 non-life insurers’ total net investment income grew by 12.7% to nearly AUD 2.1 billion in fiscal year 2025,” said Chee Yun, financial analyst, AM Best.
However, the report notes that the ongoing conflict in the Middle East has introduced significant uncertainty and risk to the insurance segment.
In response, the Insurance Council of Australia has tasked its most senior industry committee to take action to strengthen industry support.
This includes examining how cost inflation and supply chain disruptions may affect policyholders, as well as developing mitigation strategies and ensuring the industry is ready to respond swiftly for customers.
The report also revealed that non-life premium rate increases have begun to moderate in key segments; however, affordability pressures persist, prompting increased government focus on cost management and accessibility.
Cyber insurance is becoming one of the fastest-growing specialty lines within the non-life industry due to increasing incident frequency and severity.
Moreover, regulatory oversight continues to strengthen, with a focus on enhancing insurance industry resilience and adaptability in an increasingly complex risk environment.
