‘We've seen significant inflation on everything’: What this means for your insurance bill

Rising costs are a concern for many Australians, and one particular expense has been putting increasing pressure on households.

While there are signs of relief on the horizon, the road ahead remains uncertain.

Recent developments in the industry have sparked discussions about affordability, corporate decisions, and the broader economic impact.


Australians already struggling with rising insurance costs faced more increases ahead, though at a slower pace, according to Insurance Australia Group (IAG) chief executive Nick Hawkins.

IAG reported a 91 per cent increase in net profit for the first half of the financial year, reaching $778 million by 31 December 2024, largely due to milder weather conditions.

Mr Hawkins acknowledged that inflation had taken a toll on both insurers and customers, pushing costs higher across Australia and New Zealand.


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Insurance costs climb as IAG profits surge. Image source: Pexel/Andrea Piacquadio


‘We've seen significant inflation on everything,’ he said.

‘That's really had a big impact on us and our customers for the last couple of years.’

Despite the challenges, he suggested the outlook for consumers was improving.

‘I would expect the next six to 12 months to see the inflationary impact of insurance reduce,’ he said.

‘We're really seeing inflationary pressures come down. The cost of reinsurance is sort of neutralising, and that's going to be reflected in pricing going forward.’


Premiums were expected to rise more in line with inflation rather than at the rapid rate seen in previous years.

‘Not just for IAG, by the way. That would be a view on the market generally,’ Mr Hawkins added.

According to the Bureau of Statistics, insurance prices had risen 11 per cent in the year to December, easing from a peak of 16.4 per cent annual inflation in March 2023.

IAG, like many businesses, had struggled with surging costs in building materials and reinsurance, which were ultimately passed on to policyholders.

‘We had the same challenges as other businesses and communities in Australia and New Zealand.

‘Anything we needed repaired, building industry, building supplies—everything went up, plus reinsurance.’


Reinsurance, which allows insurers to share risk globally, has seen substantial cost increases in recent years.

While IAG's premiums rose 6 per cent in the last half-year, this was a slowdown from the 12.5 per cent increase in the previous period.

Although Mr Hawkins expected pricing to stabilise, he warned that reinsurance costs had ‘dramatically changed’ and would continue to influence premiums, though not as sharply as before.

Despite IAG's strong profit growth, its share price fell 12.6 per cent, closing at $7.80 on 1 February 2025.


Mr Hawkins refused to comment on his 78 per cent pay rise in the last financial year, which saw his salary reach $5 million while Australians continued to face rising insurance costs.

Instead, he highlighted IAG’s role in the broader economy.

‘There's an appropriate return we need to make because we play an important role as a shock absorber,’ he said.

‘The way we're running IAG, the way we're looking at our costs, the way we're engaging with our supply chain—I do see that inflationary pressure coming down.’


Beyond inflation, climate change poses an ongoing risk for the industry.

‘That is a risk that we are exposed to.

‘We know in Australia and New Zealand, we build communities in places that are exposed to risk.

‘We need to make sure we don't make more of those planning decisions because that risk is not coming down, it's going up.

‘We are acting, but we need to continue to act to strengthen the resilience of our country.’


IAG research following its financial update indicated a rise in consumer concerns after the January wildfires in Los Angeles.

The company noted that nearly 90 per cent of Australians and New Zealanders intended to take ‘proactive steps’ to protect their homes from natural disasters, despite domestic weather conditions being less severe.

Meanwhile, UBS Global Research reported that IAG had stronger profit margins in New Zealand due to lower exposure to compulsory third-party insurance in Australia.

‘This gave it better profit momentum in the first half of 2025,’ the note stated.


However, with minimal growth in home and motor insurance policies in Australia and a slight decline in New Zealand, IAG signalled a slowdown in premium hikes.

UBS analysts predicted that IAG would focus on increasing policy sales, noting that Suncorp had similar ambitions, intensifying competition in the market.

‘Since Suncorp is also looking to grow its customer base, competition in the market is expected to heat up.’

‘This could limit IAG's potential for surprise profit boosts and stock price growth in the near future.’

‘As a result, the company's neutral rating remains unchanged.’


In a previous story, IAG faced a massive class action lawsuit over allegations that its algorithm unfairly increased premiums for certain customers.

The case raised serious concerns about how insurers calculate pricing and whether policyholders were being charged more based on hidden factors.

Read more about the lawsuit and its potential impact here.


Stay ahead of rising costs. Here is more news about inflation.


Key Takeaways
  • IAG’s net profit surged 91 per cent to $778 million by 31 December 2024, despite rising insurance costs.
  • CEO Nick Hawkins expected price pressures to ease as reinsurance costs stabilised.
  • IAG’s share price fell 12.6 per cent, while Hawkins avoided commenting on his 78 per cent pay rise.
  • Climate change remains a key concern, with rising consumer focus on disaster preparedness.

With insurance costs shifting and competition heating up, do you think premiums will finally stabilise? Is this just a temporary slowdown?

Share your thoughts in the comments.
 

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So insurance prices supposedly rose by 11% in 2023 and 16.4% in 2024.
That's interesting. Mine rose by just over 50% and then the next year they tried an additional 25%.
Needless to say I shopped around and found a much cheaper insurer. Something I should obviously have f
done the previous year.
They increased their profit margin by 91%, that is obscene.
It seems no matter which way we turn we are being ripped off, big time, by all and sundry.
Where and when will it stop???
 
So insurance prices supposedly rose by 11% in 2023 and 16.4% in 2024.
That's interesting. Mine rose by just over 50% and then the next year they tried an additional 25%.
Needless to say I shopped around and found a much cheaper insurer. Something I should obviously have f
done the previous year.
They increased their profit margin by 91%, that is obscene.
It seems no matter which way we turn we are being ripped off, big time, by all and sundry.
Where and when will it stop???
Experienced exactly the same as you state with IAG. No claims, no chance of flooding or bush fires, my premium almost doubled. Having been with them for over a decade, I also found a better price elsewhere. Insurance is such a dodgy industry.
 
We have been with NRMA for 30 odd years, our home and contents insurance in September for renewal, had risen by around 70%.
We had downsized from a large home to a small over 55s in 2021 and instead of around $1700 for 2024, was now a quote close to $4,000
No claims etc for years.

Did not even bother to contact them for explanation, shopped around and got similar deal from another company for similar amount to 2024.
There is no Loyalty anymore, just complete greed from these big corporations.
If these companies are making huge profits as stated by Mr Hawkins, who is benefiting.
Definitely not the customers, only the CEOs as in case of Hawkins, a pay rise that takes his yearly wage to 5 million.

Complete slap in the faces of all those who take responsibility to Insure their homes and cars, compared to those who don’t and when anything happens, contact Current Affair or Go Fund page and benefit from both.
 
I have never heard of IAG.

I'm with Apia insurance and my policy renewed in January and went up from $390 amonth to $550 per month. This amount includes House + contents and car.

I called around for quotes and was surprised that this price was actually lower than most.

They all told me the same thing that insurance has gone up.

My health insurance is $400 a month which I'm thinking of dropping extras and just having hospital
 
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I have never heard of IAG.

I'm with Apia insurance and my policy renewed in January and went up from $390 amonth to $550 per month. This amount includes House + contents and car.

I called around for quotes and was surprised that this price was actually lower than most.

They all told me the same thing that insurance has gone up.

My health insurance is $400 a month which I'm thinking of dropping extras and just having hospital
 
Good grief, that’s close to $6000 a year.
Why they think seniors have loads of money is beyond me, I as well looked at a number of compaines, GIO was reasonable, APIA ridiculous quote.
The one thing, is because we live in an over 55s community, there are companies that cover only for these set ups, as same with the convertible ones.
Considering that we don’t get flooded, no fires etc, they still charge for those particular concerns.
We have health insurance, only for glasses and dental basically.
The public hospitals have everything on hand if needed, unlike many Private.
I worked in health all my life, would not go to a hospital that has no Intensive care unit.
Yes may be a wait for surgery but if an emergency , one is admitted.
This is my opinion and I certainly don’t expect others to be same.
 
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Reactions: DLHM
Good grief, that’s close to $6000 a year.
Why they think seniors have loads of money is beyond me, I as well looked at a number of compaines, GIO was reasonable, APIA ridiculous quote.
The one thing, is because we live in an over 55s community, there are companies that cover only for these set ups, as same with the convertible ones.
Considering that we don’t get flooded, no fires etc, they still charge for those particular concerns.
We have health insurance, only for glasses and dental basically.
The public hospitals have everything on hand if needed, unlike many Private.
I worked in health all my life, would not go to a hospital that has no Intensive care unit.
Yes may be a wait for surgery but if an emergency , one is admitted.
This is my opinion and I certainly don’t expect others to be same.
I agree.
 
Good grief, that’s close to $6000 a year.
Why they think seniors have loads of money is beyond me, I as well looked at a number of compaines, GIO was reasonable, APIA ridiculous quote.
The one thing, is because we live in an over 55s community, there are companies that cover only for these set ups, as same with the convertible ones.
Considering that we don’t get flooded, no fires etc, they still charge for those particular concerns.
We have health insurance, only for glasses and dental basically.
The public hospitals have everything on hand if needed, unlike many Private.
I worked in health all my life, would not go to a hospital that has no Intensive care unit.
Yes may be a wait for surgery but if an emergency , one is admitted.
This is my opinion and I certainly don’t expect others to be same.
Yes and yet GIO and Apia are just two under Suncorp. (Suncorp Insurance, AAMI, GIO, Bingle, Apia, Shannons, CIL, Vero, Terri Sheer, AA Insurance, Asteron Life, Essentials by AAI)
 
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Yes and yet GIO and Apia are just two under Suncorp. (Suncorp Insurance, AAMI, GIO, Bingle, Apia, Shannons, CIL, Vero, Terri Sheer, AA Insurance, Asteron Life, Essentials by AAI)
Impossible to get reasonable Insurance, they are all the same.
 
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Reactions: Knell
with insurance in general, your DAMBDED IF YIU DO & YOUR DAMBDED IF YOU DONT.. IF my health premiums go up much higher. i WILL DITCH IT & GO ONTO THE PUBLIC WAITING LIST, & PUT MORE PREASURE ON THE HOSPITAL SYSTEM. (thanks to these GREEDY health funds, like BUPA.
 
Years ago you could get a 5 year no claim bonus on car insurance. Not anymore. The older the car , the less its worth, yet premiums go up every year. Another example of paying more for less. Ditched life insurance years ago, same reason
 
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Reactions: SandyM
We are with RACQ and they bumped our H&C up to $2500 when the government made it compulsory that the insurance companies have to cover for flood, I rang and questioned the new condition on my policy. I was informed our contribution was $8.00
I also checked around all the APIA, Senior etc. sites for cheaper and no one could match RACQ. Also a couple of websites wanted to charge for quotes, which I think is a bit rude seeing you do the work not them.
 
You pay tax on insurance twice: GST and stamp duty. It's time that this double taxing is stopped. With insurance premiums rising, dropping one of these taxes would provide a cost of living relief which could have a flow on affect on other costs as businesses would have to pass on any premium increases to their customers. One Nation is the only partly that has come out in support of the Insurance Insurance Council of Australia's campaign against this double tax. Let's put pressure on our politicians to support the removal of one of these taxes in the upcoming election campaign.
 
So if most businesses like this that we consumers need can just increase what they charge by a huge margin like this & get away with it, it seems so unfair that we consumers cant demand higher wages, C-link payments, etc just because it's inflation causing us to go broke!
 

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