Travel

Changing purchasingbehaviour

Customisable &tech-led product

Sustainedcompetition

Premiums

Low penetration

Competitive market

Limited rate growth

Estimated GWP for APRA-authorised insurers was $1.7b in FY25, up just 1.2% vs. FY24, despite strong travel volume growth. The prospect of negative GWP growth is now a genuine risk, with sustained competition keeping rates flat and consumer price sensitivity reinforcing demand for lower-cost cover.

FY25 GWP Growth

Claims

Loss ratio back towards long-term levels

Limited rate growth

The FY25 net loss ratio was 40% on APRA-authorised business, up from 35% in FY24, which was unusually low. Upward pressure on the loss ratio is expected to occur over the coming years, driven by constrained premium growth from stronger competition.

Net Loss Ratio for FY25,
4 points worse than FY24

Profitability

Increase in loss ratio in FY25

Slight increase in expense ratio

FY25 still above long term levels

Despite rising loss ratios and constrained premium growth, the FY25 COR reflected strong profitability, comfortably achieving above the target ROE range.

ITR for FY25,
5 points worse than FY24

FY26 Outlook

Looking ahead to FY26, profitability is expected to moderate from the result observed in FY25. Growth in GWP is slowing, which is likely to constrain insurers’ ability to absorb rising claims costs. At the same time, greater competition is expected to place upward pressure on commissions. We forecast an increase in the COR, bringing profitability below the target ROE range, to levels more consistent with the pre-COVID-19 years.