Australian insurance industry GWP growth stabilizes, with differentiated profitability across product lines
AI summary card
Australian insurance industry GWP growth stabilizes, with differentiated profitability across product lines
Based on APRA Mar-26 quarter data, Goldman Sachs believes Australian general insurance industry GWP growth has stabilized at below the mid-single-digit level, personal lines remain relatively strong, commercial lines growth is weak, and overall profitability improved versus the Dec-25 quarter but with clear differences across product lines.
- Industry GWP year-on-year growth improved slightly in the Mar-26 quarter, but overall has stabilized at below the mid-single-digit level over the past few quarters.
- Premium growth in personal lines and CTP was more resilient, at around 6% and 10% respectively, while commercial lines showed notably weaker year-on-year growth.
- Industry profitability improved from the catastrophe-affected Dec-25 quarter, with all-lines COR at 92.1% in the Mar-26 quarter.
- Home profitability was weak, with COR rising to 100.3%; Motor performed strongly with COR at 87.5%; commercial lines were broadly stable in the mid-to-high 80% range.
- GWP trends in the New Zealand market are challenging, with margins retreating from elevated levels.
Report interpretation
Overview
This report reviews APRA's Mar-26 quarter statistics for the Australian general insurance industry. The core conclusion is that industry GWP growth has stabilized, personal lines continue to maintain relatively solid growth and some profitability support, while commercial lines GWP growth is weak; overall industry profitability improved versus the Dec-25 quarter, but COR performance diverged across product lines.
Core views
Goldman Sachs believes that GWP growth and profitability trends in Australian personal lines remain supportive, with Home and Motor premium growth at around 6% and CTP premium growth reaching 10.5%; however, Home COR of 100.3% indicates pressure on underwriting profitability, while Motor COR of 87.5% was strong. In commercial lines, Fire & ISR GWP declined 0.5% year on year, Commercial Motor grew 3.4%, and Public and product liability fell 8%, indicating weak overall growth momentum. Industry all-lines COR was 92.1%, improving from the Dec-25 quarter, but CTP COR remained elevated at 97.5%. The New Zealand market, meanwhile, faces weak GWP trends and declining margins.
Analysis framework
The report mainly uses APRA quarterly general insurance statistics to compare year-on-year GWP growth, 12-month rolling growth, and COR across product lines, and combines this with the prior quarter, the same period last year, and disclosures from some insurers to assess premium growth and profitability trends.
Methodology notes
Premium growth is used to measure revenue momentum, while the combined ratio is used to measure underwriting profitability.
GWP growth reflects changes in premium scale, but APRA data make it difficult to clearly distinguish the contributions from rate and volume; COR below 100% usually indicates underwriting profitability, and the lower it is, the stronger the profitability.
Goldman Sachs uses Growth, Financial Returns, Multiple, and Integrated metrics to compare covered stocks on a relative basis.
This framework is described in the disclosure section as Goldman Sachs' standardized method for comparing stock attributes, but the main body of this report is primarily an industry statistical commentary and does not provide specific company Factor Profile scores.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Australian general insurance industryCore research subject
- Strengths
- Industry-wide COR improved to 92.1%, while premium growth in personal lines and CTP remains supported.
- Weaknesses
- Industry GWP growth has only stabilized at below the mid-single-digit level, with weak commercial lines growth.
- Comparison
- Compared with the Dec-25 quarter, profitability improved in the Mar-26 quarter; however, performance differed significantly across product lines.
- Risks
- Natural catastrophes, insufficient pricing, rising claims costs, and weak commercial lines demand could pressure profitability.
- Home insuranceCore personal lines product line
- Strengths
- GWP still grew 6.1% year on year.
- Weaknesses
- COR was 100.3%, indicating weak quarterly underwriting profitability.
- Comparison
- GWP growth was below 6.4% in the Dec-25 quarter, and profitability was weaker than Motor.
- Risks
- Catastrophe losses, home repair costs, and reinsurance costs may continue to affect COR.
- Motor insuranceCore personal lines product line
- Strengths
- GWP grew 5.9%, with COR at 87.5%, showing strong profitability.
- Weaknesses
- Growth is broadly stable, lacking clear acceleration.
- Comparison
- Profitability outperformed Home and CTP.
- Risks
- Repair costs, claim frequency, and competitive pricing may affect future margins.
- Commercial linesSource of pressure on industry growth
- Strengths
- Some subsegments such as Employers liability and PI still achieved positive growth, with COR remaining in the profitable range.
- Weaknesses
- Overall GWP growth was very modest, with Fire & ISR and Public and product liability showing negative growth.
- Comparison
- Growth momentum was weaker than in personal lines and CTP.
- Risks
- A slower pricing cycle, intensifying competition, and changes in corporate customer demand may further depress growth.
Key data
- Mar-26 quarter industry GWP growthbelow the mid-single-digit levelYear-on-year growth improved slightly, but overall has stabilized over the past few quarters.
- All-lines COR92.1%Improved from the catastrophe-affected Dec-25 quarter.
- Home GWP growth6.1%Slowed from 6.4% in the Dec-25 quarter; COR was 100.3%, indicating weak profitability.
- Motor GWP growth5.9%Relatively stable over the past few quarters; Mar-26 quarter COR was 87.5%.
- CTP GWP growth10.5%Mainly driven by pricing; COR was 97.5%, still elevated.
- Fire & ISR GWP growth-0.5%12-month rolling growth was -1%; COR was 95%.
- Commercial Motor GWP growth3.4%12-month rolling growth was 5.4%; COR was 90%.
- Public and product liabilityGWP down 8%, COR at 79%Premiums declined but the underwriting profitability metric remained strong.
- Employers liabilityGWP growth 13%, COR at 87%Premium growth was relatively fast, and COR remained in the profitable range.
- Professional IndemnityGWP growth 7%, COR at 88%Year-on-year growth with COR maintained in the profitable range.
Impact & implications
For Australian insurance stocks and industry fundamentals, personal lines still provide relatively stable support for revenue and earnings, with strong underwriting profitability in Motor; however, pressure on Home profitability, elevated CTP COR, and weak commercial lines GWP growth mean the improvement in industry profits is not balanced. Investors need to differentiate exposure by product line rather than judge trends solely based on aggregate industry GWP or COR.
Risks
- APRA data make it difficult to clearly separate the contributions of pricing and volume, creating uncertainty in judging growth quality.
- Home COR above 100% indicates that some personal lines products may still face underwriting loss pressure.
- CTP COR remains elevated at 97.5%; if repricing is insufficient, profitability improvement may be limited.
- Weak commercial lines GWP growth may drag on industry revenue momentum.
- GWP trends in the New Zealand market are challenging, and margins are retreating from high levels.
What to watch
- Whether rate adjustments in personal lines continue to support GWP growth in coming quarters.
- Whether COR in Home and CTP can decline to healthier levels.
- Whether GWP in commercial lines subsegments can recover from weakness.
- The impact of catastrophe events and reinsurance costs on the industry's combined ratio.
- Whether GWP and margins in the New Zealand insurance market continue to weaken.