S&P Global Ratings expects Australian general insurers to maintain robust earnings next year, barring major catastrophes or escalation of risks such as supply chain disruption.

Premium adjustments in recent years contributed to the industry’s profitability this year and will remain a key earnings driver, the ratings agency says in its 2026 outlook.

“We’re seeing at the full-year and half-year results strong performance by the property and casualty companies really reflecting a combination of things,” S&P analyst Craig Bennett told insuranceNEWS.com.au.

“It’s been a continuation of premium rate rises, particularly across the personal lines of home and motor. Home has also had the benefit of not having as many claims as in the past from natural disasters.

“We’re expecting profitability to remain solid to strong, really reflecting the past premium rate increases that have gone through, and also efficiency gains that have come through … [there are] no particular headwinds for property and casualty insurers at this point.”

The cyclone reinsurance pool has also made a difference, containing the industry’s exposure to storms. Mr Bennett says the Commonwealth-backed pool has “supported writing business in otherwise higher-risk areas”.

S&P notes that while premium rises have supported industry earnings, they have strained consumers, especially in the personal lines space.

“Sequential premium rate increases have weighed on insurance affordability … This has curbed growth in new policies as policyholders are retaining greater risks, reducing the extent of coverage or dropping cover altogether.”

The ratings agency says cybercrime is one of several threats facing the industry.

“Robust cybersecurity is essential for operational resilience, amid growing reliance on technology such as cloud and digital platforms. Adoption of generative artificial intelligence poses additional complexity risks.”

Claim costs could rise if supply chain disruption fuels inflation in motor repairs and maintenance.

Primary and secondary natural perils are a constant threat because they are difficult to forecast and their associated costs are challenging to quantify. “Australia has had increasingly large losses from secondary perils in recent years,” S&P said.