While 2023 was a calmer year after a challenging 2022, major forces of economic and environmental change persist
Persistent inflation in the first half of 2023 saw interest rates rise, increasing living costs and challenges for Australian households.
While climate events were fewer in 2023, the underlying risk Australian insurers face due to an increasingly volatile natural environment have fundamentally altered Australia’s insurance landscape.
This higher risk environment has increased the cost of reinsurance, which alongside inflation and supply chain issues, has resulted in an unavoidable spike in premiums.
“It is the new normal to expect uncertainty. Our focus is that our people have the support, training, and technology to be prepared and resilient to what could come next.”
– Tim Mathieson, CEO, QIB Group
2023 also saw new, challenging, and exciting technologies begin to disrupt the economy. The proliferation of generative AI and new AI language models caused fears among some that the world would be dominated by runaway artificial intelligence. But these recent technologies also offer hope for a more productive economy that creates more for more people and improves living standards.
In the insurance sector, incorporating these modern technologies also provides a chance to enhance existing customer services, streamlining how people interact with insurers.
The reality is that Australia will continue to face considerable forces of economic, environmental, and technological change. Progress and evolution are inevitable.
The challenge is not avoiding this change but communicating it accurately to consumers and ensuring that the forces of change and their impact on insurers and insurance costs are well understood.
The natural optimism of the Australian spirit remains a constant. In the face of continuing uncertainty, many acknowledge that people are more resilient and resourceful than ever before, occupying their ‘new normal’ with wisdom gained from adapting to the disruptions of the past.
Progress and evolution are inevitable. The challenge is not avoiding this change, but communicating it accurately to consumers, and ensuring that the forces of change, and their impact on insurers and insurance costs, are well understood.
This concludes the second instalment of the CGU STRIVE Report, providing insights to support brokers and customers with increasingly complex insurance conversations in an ever-changing world.
We hope the information presented within helps empower our audience with greater awareness of the economic, environmental, socio-political, and technological drivers that sit behind their insurance program, powering them towards realising their ambition.
