The general insurance market in Australia survived and thrived in 2020 despite taking a hit from the COVID-19 pandemic – with property and casualty (P&C) insurance premiums growing by 0.8% last year compared to a 2.1% decline in premiums globally, according to insurance giant Allianz’s latest data.
The annual Allianz Global Insurance Report – which analysed the growth, declines, and trends of 61 major insurance markets – revealed that Australia’s market stability reflected the state of the country’s economy. In particular, the higher the GDP per capita, the higher the gross written premium (GWP) per capita – indicating a positive correlation between economic growth and P&C insurance market growth.
Allianz expects local industry growth to continue throughout 2021, indicative of Australia’s strong economic recovery following the COVID-19 pandemic – with the country’s P&C premiums predicted to increase by 3.8%.
The report also projected the rebound’s momentum to be maintained over the next decade, with premiums expected to increase an average of 4.2% per annum (2021 to 2031). The optimistic prediction mirrors the global situation, with P&C premiums expected to soar by 4.2% this year, and 4.6% per annum on average over the next decade.
Allianz Australia chief technical officer James Fitzpatrick noted the insurance market’s resilience despite the pandemic’s impact.
“This is evident in the industry’s continued growth and strong expected rebound in 2021. Australia’s economy has already bounced back positively; and the report’s findings and projections reflect this broader economic recovery,” Fitzpatrick said.
“Australians’ appetite to buy and build homes is being fuelled by the Federal Government’s Homebuilder and New Home Guarantee schemes, which will help drive growth in home and contents premiums. We also expect a growth in motor premiums driven by a recovery in new car sales as pandemic-caused supply chain delays reduce.”
