The Australian Prudential Regulation Authority (APRA) has released its suite of quarterly industry aggregate insurance statistical publications for the December 2024 quarter, providing insight into the financial performance and stability of general, life, and private health insurance sectors.
The latest figures show a strong finish to the year, with continued revenue growth, steady profitability, and increasing policyholder participation across multiple insurance categories.
Australia’s general insurance industry continued its upward trend in the December 2024 quarter, with insurance revenue rising to $19.2 billion, up from $18.6 billion in the previous quarter. At the same time, insurance service expenses climbed to $13.9 billion, reflecting higher claims and operational costs. Despite this, the sector posted a solid $2.2 billion insurance service result, driven by short-tail property classes ($1.03 billion) and inwards reinsurance ($596 million).
Profits also saw a jump, with net profit after tax reaching $2.08 billion, up from $1.54 billion in the previous quarter, thanks to stronger investment returns of $1.84 billion. The industry’s return on net assets rose to 5.4%, indicating improved financial performance.
Meanwhile, total assets grew to $135.6 billion, with net assets reaching $39.1 billion. Insurers also kept their capital reserves stable, with a prescribed capital amount coverage ratio of 1.85, ensuring financial resilience as they closed out the year.
Australia’s life insurance industry made a notable comeback in the December 2024 quarter, bouncing back from weaker results earlier in the year. Insurance revenue rose to $6.18 billion, while service expenses reached $5.43 billion, reflecting ongoing claims and operational costs.
The sector also saw a significant improvement in its insurance service result, which climbed to $638 million after barely breaking even in December 2023.
The industry’s overall financial health also showed positive signs. Net profit after tax from continuing operations landed at $459 million, a solid turnaround from the $443 million loss a year ago. Strong investment returns of $2.7 billion played a key role in this rebound. With total assets growing to $136.2 billion and the capital coverage ratio holding at 2.15, the life insurance sector ended the year on stronger footing, signaling improved stability for both insurers and policyholders.
Australia’s private health insurance sector wrapped up 2024 on solid footing, with both financial stability and growing membership. Insurance revenue rose to $8.23 billion in the December quarter, a slight bump from the previous period, but service expenses also climbed to $7.68 billion as healthcare costs continued to rise. Despite the added pressure, insurers stayed profitable, recording a service result of $518 million and a net profit of $581 million – a slight dip from $627 million in the previous quarter.
The sector’s financial strength remained intact, with total assets at $19.94 billion and insurers maintaining a capital coverage ratio of 2.59, ensuring they have enough reserves to meet policyholder needs.
More Australians also opted for private health coverage, with hospital treatment membership reaching 12.17 million people or 44.8% of the population – an increase of 79,023 individuals from the previous quarter. Both family and single policies saw growth, with the 0-4 age group and 40-44 age group and leading the surge.
When it came to claims, insurers paid out $4.29 billion in hospital treatment benefits, down 4.1% from the previous quarter, though the average benefit per person actually increased year-over-year.
The bulk of these payouts went to hospital services, medical procedures, and prostheses.
On the other hand, general treatment benefits climbed to $1.66 billion, with dental and optical services receiving the biggest share. Despite some fluctuations in payouts, the sector remained steady, continuing to provide strong support for policyholders amid rising healthcare costs.
