Australia's general insurance market is being compressed by both affordability and inflationary forces, impacting both policyholders and insurers and threatening a worsening of insurance outcomes, particularly as we all face more severe exposure to losses through exacerbating climate and natural perils events.
On one side, cost-of-living pressures are eroding capacity to pay for cover, leading to poorer coverage outcomes as insurance becomes increasingly discretionary. On the other side, claims inflation has been exacerbated across several lines including motor and home, particularly in recent times due to supply chain constraints and higher oil prices.
The resultant affordability pincer of rising premiums and decreasing ability to pay is concerning. While top-line figures have grown in the industry over recent years, it masks a more fragile policyholder pool which is self-selecting and in some cases, contracting. The potential consequences of these impacts are substantial and represent a lose-lose situation for both insurers and policyholders.
In this talk, we will dive into the drivers of these pressures and discuss what is currently being done to try to address these issues.
Speaker
Alan Xian - Manager, Taylor Fry