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 andโ motorists, economists say. Concerns about insurer revenue streams are worryingโ investors, but easing price rises in the sector offer a potential downward pressure on overall inflation.
Montgomery,โ a market analyst, highlighted pressures on insurers stemming from “inflation and rising claims costs,” andโ “contagion risks” โvia โreinsurance โคand lending tiesโ to perhaps distressed โคregional US banks.
Australian Bureau of Statistics (ABS) data showsโ a significant slowdown in โคinsurance price increases. In the June โquarter, rises dropped from 14 per cent increases last year to less than โ4 per cent โin the 12 months to the June 2025โฃ quarter.
Insurance prices contribute roughly 1.4 per cent to the overall basket of goods โขand servicesโ measured by the ABS for its inflation calculations.A further reduction in premium growth could lessen this contribution to โoverall inflation.
Any material reduction in underlying inflation would strengthen the argument for further โreserve Bank interest rate cuts, especially if originating from the services sector,โ which the Reserve โขBankโฃ has repeatedly identified as exhibiting particularly “sticky” โinflation. Analysts anticipateโค thisโ may โnow โbe changing.
Recent โฃdata shows Australia’s unemploymentโ rateโ jumped to 4.5 per cent โin September,up from 4.3 per cent in August.
