Allianz says the Australian general insurance market has held up well, shrugging off the pandemic disruption to record a 0.8% growth in premium to €28 billion ($44 billion) last year.

It expects the momentum to continue, projecting the market is in line for an average 4.2% growth every year until 2031 when premium will total about €43 billion ($68 billion).

The predictions are contained in Allianz’s annual Global Insurance Report covering 61 major markets including Australia.

Allianz says property and casualty (P&C) demand has held up well despite the economic disruptions of the pandemic, linking the resilience of the market to the strength of the Australian economy. Massive fiscal support measures largely cushioned the economy since the pandemic broke out in March last year.

“The insurance market has proven resilient in the face of the economic impact of the pandemic,” Chief Technical Officer James Fitzpatrick said. “This is evident in the industry’s continued growth and strong expected rebound [this year].

“Australia’s economy has already bounced back positively; and the report’s findings and projections reflect this broader economic recovery.”

He says the Federal Government’s Homebuilder and New Home Guarantee schemes have underpinned the housing market, indirectly lifting growth in home and contents premium.

Motor premium is also likely to grow, driven by a recovery in new car sales as bottlenecks on supply chains caused by the pandemic gradually ease.

In the report, Allianz says the insurance industry “got off relatively light” during the COVID-19 crisis despite a 2.1% decline in global premium.

It says the decline was less severe than feared, due in part to the P&C sector, which managed to grow its premium by 1.1%.

“In retrospect, there is one factor in particular that contributed to the resilience of the non-life business: digitalisation,” Allianz says.

“The rapid and smooth transition to digital processes in both sales and operations largely avoided a standstill in new business, which threatened to result from the many contact and mobility restrictions implemented to contain the pandemic.”

Click here for the report.