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Insurance spending holds up as consumers find other cuts 

Australians are holding onto essentials such as home insurance but cutting discretionary spending, according to CommBank.

The bank’s monthly Household Spending Insights Index shows insurance spending went up 0.6% last month after a 0.9% rise in April. Insurance spending last recorded a fall in April 2021.

In the year to May, it led the way with an 8.6% increase. Utilities, one of 12 categories tracked by the index, was second with a 7.1% rise.

CommBank says the largest increases in insurance spending in the 12-month period were in home and motor cover, health insurance and pet cover. Travel and life insurance recorded falls over the same period.

“When looking at spending trends since January ... we can see the consumer spending environment remains muted, having risen by just 0.1% per month on average since January and driven in large part by spending on essential categories like insurance, utilities and transport,” senior economist Belinda Allen said.

“This suggests that consumers are still needing to make spending choices and are prioritising essential purchases.”

Household or consumer spending is tracked closely because it is the largest component of the nation’s economy, accounting for about half of GDP.