Australia’s big three general insurance companies are making a killing off the back of sky-high premium increases for customers over the last financial year, according to their recent reports.
IAG, the biggest player in the market, yesterday posted insurance profits of $1.42 billion, up 79.1 per cent on the previous financial year, helped by a 11.3 per cent increase in revenue on premiums charged to consumers and businesses
On Monday, Suncorp posted an $801 million profit from the insurance arm of its business in the last financial year, a 17 per cent increase on the previous year, and a 255 per cent increase on the year before. Revenue from Suncorp premiums similarly grew by 13.9 per cent.
Earlier in August, QBE posted a nearly 100 per cent increase in profits, of $802 million for its half-yearly results, up from the $404 million profit posted for the same time last year.
The results come as working people pay more for insurance, with premiums up by 36 per cent since March 2021 and more increases on the way.
Since February, insurers have been advising customers to expect double-digit premium price increases for most products, including home and car insurance, representing a new cycle of extreme price hikes.
Quotes attributable to ACTU Assistant Secretary, Joseph Mitchell:
“The results come as the price of insurance has risen by 14 per cent in the past 12 months, the biggest increase of any item in the Consumer Price Index.
“Insurance companies are driving up inflation and hurting the economy. In March 2021, insurance contributed around 3.1 per cent of the total annual growth in the CPI. Now, because of these rapid price rises, insurance contributes 5.7 per cent to the CPI, as shown in the June quarter 2024 results.
“The insurance companies are crying poor and blaming cost increases but they have increased premiums well above costs to post record profits, using the same price gouging formula as other major businesses coming out of the pandemic.”
Quotes attributable to Finance Sector Union National Secretary, Julia Angrisano:
“It is disgraceful that insurance companies are gouging consumers by raising premiums. At the same time, many insurers are disrespecting their workers by refusing to negotiate pay rises.
“QBE has refused since 2019 to negotiate for fair pay and conditions with its workforce, despite earning $3.2 million per employee last year, or $170,000 in profit per employee.
“Similarly at Suncorp, it has been nearly a decade since the company negotiated with its workforce over pay and conditions, despite posting stellar profits.
“The insurance and finance industry also has one of the largest gender pay gaps, with the average base salary gender pay gap at 20 per cent, and the average total gender pay gap at 26.2 per cent.
“IAG for example, has a gender pay gap of a staggering 27.5 per cent.
“Performance based pay models not only lack transparency, but make the gender pay gap worse and only serve to line the pay packets of executives and chief executives.
“Discretionary pay practices like bonuses and the industry’s obsession with market-based salaries also contribute to women in insurance facing some of the largest pay gaps.”
