Full Capacity: Aussie insurers’ record profits, soaring shares and stubborn premiums

August 16 2025 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.  

Captive ambitions. Hong Kong’s push to become a leading captive insurance hub is gaining momentum – but is it moving fast enough? The recent approval of SAIC Motor Insurance, a captive insurer for Chinese state-owned automaker SAIC Motor Corporation, marks the sixth captive licensed in the city. 

The addition of SAIC Motor Insurance is a positive sign – it shows that Hong Kong’s regulatory framework is attracting interest. However, five of the six captives in Hong Kong are mainland-backed, with HSBC’s captive (approved in May) being the only exception. 

Last year, Hong Kong’s captive business posted US$220 million in GWP, said HKIA. 

The question is: Can the SAR truly compete on the global stage, or will it remain a niche market for mainland Chinese firms? 

HKIA noted that it is examining the feasibility of accommodating additional captive structures and widening the scope of risk coverage, with a view to enhancing its global competitiveness. 

Connecting Asia. US broking giant Brown & Brown’s international specialty arm Bridge Specialty is showing that it is serious about its Asian plan. Having acquired two companies in the region’s hubs, this week Bridge announced a leadership reshuffle with Acorn International founder David Ong set to move into a chairman role. This follows the appointment of Abhishek Chhajer as chief executive of Singapore broker Acorn International. Chhajer, who joins from Price Forbes, has also been appointed director of Capstone, Bridge’s Hong Kong unit. 

APAC underperforms. Hannover Re’s latest earnings tell a tale of two markets: steady global growth contrasted with a surprising dip in Asia Pacific.  

While the German reinsurance giant posted a 3.3% rise in overall reinsurance revenue to US$15.6 billion, its Asia-Pacific book shrank by 5.4% to US$1.6 billion. In Australia, it fell 3.7% to US$823 million and in Australasia, which groups Asia’s revenues alongside Australia, the topline fell by 4.8% to US$2.5 billion.

Tighter controls. Australia’s competition watchdog is flexing its muscles, and corporate dealmakers are feeling the squeeze. The country’s new merger control regime, passed in November, marks a dramatic shift in how acquisitions are policed – moving from a reactive “enforcement model” to a proactive “administrative” system.  

M&A lawyers aren’t happy. One Sydney-based practitioner slammed the rules as “a complete overreach”, warning that the thresholds are so broad they’ll ensnare not just big-ticket global deals but even smaller domestic transactions – including insurance broking mergers. 

There is also the question of compliance burden and prohibitive cost. 

The Australian Competition and Consumer Commission did tell InsuranceAsia News that the thresholds will be reviewed 12 months after coming into effect to ensure they are working as intended and effectively capturing relevant mergers without creating undue burden. 

Earnings windfall

It is results season and has been a triumph for Australia’s insurance heavyweights – IAG, Suncorp and QBE. 

The country’s big three have just delivered blockbuster earnings, defying economic headwinds and proving the resilience of the sector.  

This results season, IAG’s net profit surged 51.3% to US$890 million, Suncorp’s jumped 53% to US$1.2 billion, and QBE posted a  27% profit increase to US$1.02 billion.  

These numbers aren’t just impressive – they reflect an industry firing on all cylinders, buoyed by rising premiums, lower-than-expected catastrophe claims, and easing inflation. 

A particularly bright spot for all three have been their New Zealand businesses. 

Aided by a benign loss environment, IAG’s New Zealand combined ratio was 74.6%, down from 79.5% in 2024. Suncorp New Zealand’s combined ratio for the year was 80.9%, down substantially from 90.3% in FY24. QBE New Zealand delivered a combined operating ratio of 86.8%, which was “a meaningful improvement” compared with 95.6% in the prior period. 

For investors, this is a golden era. IAG’s shares have climbed 20% in a year, Suncorp is launching a US$260 million buyback, and QBE is optimising its portfolio for higher returns.  

While the market has benefited from rating increases, but with claims moderating inflation and catastrophe costs coming in below expectations, premiums are softening.  

The guidance suggests not yet – IAG expects 10% GWP growth in 2026, and Suncorp forecasts mid-single-digit increases. 

IAG’s acquisitions of RACQ and RACWA’s underwriting businesses – adding US$2 billion in GWP – show a clear play for market consolidation.  

Suncorp, meanwhile, has cashed in on asset sales (its bank and New Zealand life business) to bolster profits. QBE is reshaping its portfolio, exiting non-core segments to focus on profitability. 

These moves signal a sector that’s getting bigger, leaner, and more dominant. But with greater concentration comes reduced competition. 

Insurers are quick to highlight their improved catastrophe resilience, but climate change remains a looming threat.  

Suncorp has already increased its natural hazard allowance for 2026 to US$1.1 billion.  

Australia’s insurers are in a sweet spot – strong pricing power, manageable claims, and robust investment returns. But the question is whether this golden run will translate into better value for customers or simply higher profits for shareholders. 

For now, the industry is winning. But if premiums don’t reflect the improving cost environment, regulators and consumers may start asking tougher questions in a market that has been squeezed by insurance premiums. 

People moves

Gallagher Re has appointed Richard Jones as chairman for Southeast Asia, Taiwan and South Korea, confirming an exclusive report by InsuranceAsia News in February. 

Howden has appointed veteran maritime professional Hari Subramaniam as chief commercial officer for its marine, cargo and logistics global practice. 

Aon’s reinsurance solutions confirmed Manila-based Jocelyn Po new country head for the Philippines. 

To keep up with the latest appointments across the region, don’t miss our weekly people move roundup.   

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