Wall Street concerns signal potential for Australian insurance premium relief
SYDNEY – A sell-off on Wall Street, driven by anxieties over global insurer profitability, could translate to lower insurance premiums for Australian households and motorists, economists say. Concerns about insurer revenue streams are worrying investors, but easing price rises in the sector offer a potential downward pressure on overall inflation.
Montgomery, a market analyst, highlighted pressures on insurers stemming from “inflation and rising claims costs,” and “contagion risks” via reinsurance and lending ties to perhaps distressed regional US banks.
Australian Bureau of Statistics (ABS) data shows a significant slowdown in insurance price increases. In the June quarter, rises dropped from 14 per cent increases last year to less than 4 per cent in the 12 months to the June 2025 quarter.
Insurance prices contribute roughly 1.4 per cent to the overall basket of goods and services measured by the ABS for its inflation calculations.A further reduction in premium growth could lessen this contribution to overall inflation.
Any material reduction in underlying inflation would strengthen the argument for further reserve Bank interest rate cuts, especially if originating from the services sector, which the Reserve Bank has repeatedly identified as exhibiting particularly “sticky” inflation. Analysts anticipate this may now be changing.
Recent data shows Australia’s unemployment rate jumped to 4.5 per cent in September,up from 4.3 per cent in August.
