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Insurance premiums could climb as much as 15%: KPMG

Date Published : Thursday, September 11, 2008

There could be a double-digit increase in insurance premiums in the near future, it has been reported.

As a result of a decline in gross written premiums and an increase severe weather events, Australians could soon be paying lot more for their insurance, the Mercury reported.

According to a survey by accounting group KPMG, the Australian insurance industry saw around 20 per cent wiped off its profits in 2007-08.

It was reported that tax profits for the whole industry fell from $4.005 billion to $3.215 billion as insurance firms were hit by falling premiums, as well as an array of floods and storms.

Brian Greig, KPMG's Insurance Group head, told the newspaper that the weather events cost the insurers in excess of $1.154 billion but added that "part of the cost was borne by reinsurers".

Mr Greig said that premiums could climb between hit more than double figures as a result of the poor performance of the country's insurers.

He predicted that premium increases could "vary anything between five and 15 per cent across the board", but stated that it will be hard to judge because of the way they segment their client bases.

Insurance Australia Group posted a net loss of $261 million during 2007-08 while rival QBE also recorded a decline in earnings.

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