In a sign that home insurance costs are set to rise further, Insurance Australia Group (IAG) says it expects its home insurance portfolio to rise by double-digit percentages for 2014-15, according to The Australian Financial Review.
The forecast from the chief executive of IAG's Australia Direct business, Andy Cornish, comes as IAG reported that home insurance premiums have been raised for at least 20 per cent of its customers in New South Wales.
“In FY14, I'm still expecting to see double-digit growth increases in home, much less in motor [which will be] low single digits,” Mr Cornish said, according to the AFR.
“But I think it will be less extreme – some people have seen routine price increases of 20, 30 per cent or more [in home cover]. I would see that it would be closer to 10 per cent.”
IAG reported a tripling of net profit to $461 million during the six months to December, thanks largely to fast-climbing premiums and a limited amount of weather-related damage.