Best’s Market Segment Report: Australia’s Non-Life Insurance Segment Navigating Growth in a Volatile Landscape

SINGAPORE--(BUSINESS WIRE)--Australia’s non-life insurance industry has been resilient against an increasingly complex and interconnected risk landscape, with total insurance revenue for the non-life market reaching approximately AUD 77.7 billion (USD 54.1 billion) for the fiscal year ended 30 June 2025.

According to the Best’s Market Segment Report, “Australia’s Non-Life Insurance Segment: Navigating Growth in a Volatile Landscape,” the 10 leading Australia-based non-life insurers reported a combined full-year insurance revenue of nearly AUD 46.0 billion in fiscal year 2025, an increase of 11.1% year over year. All 10 recorded insurance revenue growth, including five with two consecutive years of double-digit gains. Additionally, benign catastrophe losses, strong investment returns and the cumulative effect of premium rate increases across core business lines helped to improve profitability and underwriting performance across Australia’s entire non-life industry in fiscal year 2025. In the 12 months up to 30 June 2025, the non-life segment generated AUD 10.5 billion in profit before tax. 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.

The non-life segment remains the dominant force in Australia’s insurance industry, representing 58% of total insurance market revenue in fiscal year 2025. While direct insurance represents more than 90% of total non-life revenue, reinsurance continues to play a vital role in mitigating large-scale catastrophe risks and supporting market stability. The direct non-life segment’s net combined ratio remained under 100% across all four fiscal quarters, indicating sustained underwriting profitability.

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. To amplify industry support, the Insurance Council of Australia has tasked its most senior industry committee to examine how cost inflation and supply chain disruptions may affect policyholders, as well as develop mitigation strategies and ensure the industry is ready to respond swiftly for customers.

Takeaways from the report also include:

• 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.
• Regulatory oversight continues to strengthen, with a focus on enhancing insurance industry resilience and adaptability in an increasingly complex risk environment.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=364175.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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