[ad_1]
One of Australia's biggest insurers is set to raise premiums this financial year by up to 9 per cent as labour shortages, inflation and extreme weather continue to push up insurance costs for customers.
Insurance giant Suncorp, behind brands including AAMI, GIO and Apia, said on Monday that insurance premiums had “moderated” over the past six months, but warned that costs associated with home repairs after severe flooding and bushfires in recent years were putting further pressure on the business.
Suncorp CEO Steve Johnston expects insurance premiums to rise by up to 9 percent. credit: Paul Harris
Over the past five years, Suncorp has responded to 700,000 claims costing more than $9 billion, impacting the price of reinsurance and the amount it sets aside for natural risks.
These input costs added $1 billion to the company’s bottom line, which was passed on to customers. Higher insurance costs were the biggest contributor to inflation after the country’s heavy floods in 2022 sent premiums soaring.
While annual inflation eased to 3.8% in the second quarter of the year, according to the latest Consumer Price Index figures from the Australian Bureau of Statistics, insurance costs rose 14% – down from a high of 16.4% in the previous corresponding period.
“We see some inflationary trends starting to slow down,” [in motor insurance]“This means that some inflation will ease from low double digit levels to high single digit levels, and our premiums will adjust accordingly,” said chief executive Steve Johnston.
“In home insurance, it's a little bit more complicated because we're seeing an increase in the severity of water damage inside the home, as well as catastrophic losses due to fires.”
House fires were exacerbated by lithium batteries, adding to the cost of claims, Johnston said, and homes were flooded by flexible water pipes installed more than a decade ago that burst and caused extensive damage.
[ad_2]
Source