Insurers are the unlikely stars of this profit season, prized by investors for their ability to push higher premiums on to policyholders, after years in the equity market wilderness.
Concerns linger, however, about whether customers will ditch their cover if prices keep rising.
QBE pushed through premium rate rises of 12 per cent in Australia, according to its first-half profits issued on Thursday. Suncorp on Wednesday demonstrated policy price growth of 12 per cent in home cover and 13.5 per cent in motor.
Sydney-based QBE, largely known for its heavy focus on business insurance and which operates in 27 countries, echoed its rivals in maintaining that itscustomers are sticking with cover despite premium inflation and some conditions tightening.
The rising prices and better investment returns are among factors meaning some investors are increasingly optimistic about the insurance sector, even as climate change is linked to wild weather causing high disaster bills.
In the past 18 months, Australian east coast flooding caused a record $5.98 billion insurance bill while flooding and storms in New Zealand’s North Island cost almost $3 billion. But forecasts of an El Nino dry period this year, if accurate, indicate lower claims ahead.
QBE chief executive Andrew Horton says people need insurance. Oscar Colman
QBE chief executive Andrew Horton said customers had not yet hit the point of abandoning cover. “We are worried and continue to think about affordability of insurance,” he told The Australian Financial Review.
But he argued people needed to have insurance: “The catastrophes just get larger and larger, and are exposing more properties to it,” he said.
He pointed to QBE in the past six months posting a combined operating
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