$5.8bn profit: Which insurance firms come out on top?

It’s been a bumper year for insurance companies as profits quadrupled amid a comeback from Covid and soaring premiums. Find out if your insurer is among them.

Australia’s biggest insurers benefited most from a dramatic rebound in the industry’s profitability that came amid steep premium rises for customers, an exclusive News Corp analysis of official data reveals.

Across both types of insurance – life insurance and general insurance, which includes everything from pets to cars and homes – total profit has quadrupled, ballooning from $1.4bn in the 2022 financial year to $5.8bn in the 2023 financial year.

Profits in the bigger of the two sectors, general insurance, grew the most, exploding by five times from $0.9bn to $5.8bn as the industry bounced back from a Covid-era slump.

It comes amid a crackdown by the Australian Securities and Investments Commission, with deputy chair Karen Chester last week telling News Corp the industry needed to pour more resources into dealing with insurance claims and deliver on promises it makes about premium prices.

ASIC deputy chair Karen Chester. Picture: Britta Campion.

Complaints about denied and delayed insurance claims have soared following last year’s devastating floods on the east coast and last week ASIC launched legal action accusing Australia’s biggest insurer, IAG of using a secret algorithm to cheat loyal customers of discounts.

Assistant Treasurer Stephen Jones has also called a parliamentary inquiry into the industry’s response to the floods.

Pointing the finger... Assistant Treasurer Stephen Jones. Picture: David Beach

The new profit data, from the Australian Prudential Regulation Authority, shows that IAG, which controls household insurance brands including NRMA, CGU, SGIO, SGIC, Swann, WFI and Lumley, had the steepest increase in profit.

IAG’s general insurance profit rose more than five times from $157m to $816m amid soaring premiums and a promise this week from chief executive Nick Hawkins to inflict more hip-pocket pain on customers in coming months.

In second place was Suncorp, which is both a bank and an insurance company offering policies under a large number of brand names including AAMI, GIO, Bingle, Apia, Shannons, Terri Scheer, CIL and Vero.

Its general insurance profit exploded by more than four and a half times, from $152m to $724m.

IAG CEO Nick Hawkins. Picture: Nikki Short

QBE, which sells insurance both in Australia and around the world, had the third-biggest profits. Its general insurance profit swelled by more than three and a half times, from $174m to $633m.

Fourth-placed Allianz swung back into profit of $432m after a $24m loss on general insurance in Australia in 2022.

Fellow Swiss company Zurich’s Australian profit grew fourfold, jumping from $33m to $133m.

Other insurers also did well, with Chubb coming back from a $36m loss to post a $158m profit while Youi’s profit grew more than threefold, increasing from $35m to $113m.

Profit in the smaller life insurance sector more than doubled, rising from $0.5bn to $1.2bn.

Not all insurance companies have done well. Catholic Church Insurance, declared a general insurance loss of $279m for the 2023 financial year after breaking even the year before.

It has been under financial pressure after paying out tens of millions of dollars a year to the victims of sexual abuse by clergy.

CCI stopped issuing new insurance policies in May but continues to be liable under ones already in force.

The profit figures released by APRA are for insurance only and don’t take into account other businesses run by the companies, so they may differ from full financial results.

Originally published as $5.8bn profit: Which insurance firms come out on top?