According to KPMG's annual review, the average home insurance premium rose by 19.3%, from $1,070 to $1,277, while car insurance premiums increased by 12%, from $845 to $945. These increases have been a point of contention among policyholders, especially given the industry's substantial profit margins.
Scott Guse, KPMG's assurance and risk partner, noted that 2024 was a relatively benign year in terms of catastrophic weather events, which contributed to the industry's profitability. However, he cautioned that future profits could be eroded if Australia experiences a year with severe natural disasters.
For tradespeople and small business owners, these developments underscore the importance of regularly reviewing insurance policies to ensure they provide adequate coverage without overpaying. It's advisable to compare offerings from different insurers and consider factors such as coverage limits, exclusions, and the insurer's claims handling reputation.
Additionally, implementing risk management strategies, such as securing tools and equipment, maintaining a safe work environment, and staying informed about industry regulations, can help mitigate potential risks and may lead to more favorable insurance premiums.
