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Rising Insurance Premiums and Declining Profits in Australia

KPMG Highlights Impact of Natural Disasters on Insurance Industry

Rising Insurance Premiums and Declining Profits in Australia?w=400

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Recent findings from KPMG's annual review of the general insurance industry reveal a concerning trend for Australian businesses: insurance premiums are on the rise, while industry profits are experiencing a downturn.
This development is largely attributed to the escalating costs associated with natural disasters.

In 2025, Australia faced a series of severe weather events, including Ex-Tropical Cyclone Alfred, which led to substantial claims. These events have significantly impacted the financial performance of insurers, resulting in a notable decrease in profits. Consequently, insurers have responded by increasing premiums to offset these losses.

For small to medium-sized enterprises (SMEs), this trend presents a dual challenge. Higher premiums add to operational costs, while the increased frequency of natural disasters heightens the risk of business interruptions. It's imperative for business owners to reassess their insurance coverage to ensure it aligns with their current risk exposure.

To navigate this evolving landscape, SMEs should consider the following steps:

  • Conduct a Comprehensive Risk Assessment: Evaluate your business's vulnerability to natural disasters and other potential risks. This assessment will inform the necessary coverage adjustments.
  • Review and Update Insurance Policies: Ensure that your existing policies provide adequate coverage in light of increased risks. Pay special attention to policy exclusions and limitations.
  • Explore Bundled Insurance Packages: Bundled packages can offer comprehensive coverage and may be more cost-effective than individual policies.
  • Engage with Insurance Brokers: Professional brokers can provide tailored advice and help identify the most suitable policies for your business needs.

Staying informed about industry trends and proactively managing insurance coverage are crucial for SMEs aiming to mitigate financial risks associated with natural disasters and rising premiums.

Published:Saturday, 25th Apr 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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Knowledgebase
Loss Ratio:
The ratio of claims paid by an insurer to the premiums earned, used as a measure of profitability.