FY26 Results, the FY27 Outlook and Six Things to Watch
As we move through the second quarter of FY27, I want to share my views on the results season just finished. APRA has published its full year to June, IAG and Suncorp have reported FY26, and QBE has reported its first half. Six themes stand out:
Affordability and pricing. In personal lines, FY26 premium growth came from price, not from more customers. Motor pricing has now caught up with claims costs, but Home remains under pressure from continued claims inflation and natural perils. Commercial lines moved the other way: rates kept softening as capacity grew and competition intensified from international carriers and underwriting agencies.
Technology and productivity. Expense ratios fell across almost every product, but that is premium growth doing the work. In dollar terms total expenses across the direct market rose 2.1% from FY25 to FY26, with acquisition costs up 4.0% and administration expenses flat. We do not yet see the technology investment in the financials, and the question for FY27 is how and when it starts to deliver a material benefit.
Change readiness has never been so important. Every major insurer is running technology, claims and pricing programs at the same time, while Home margins are under pressure. The gap between insurers will be decided less by strategy than by whether people, processes and partners can absorb the change. Our Change Readiness Assessment below sets out how to test that.
Claims transformation is becoming the battleground. Home claims cost per policy rose 22% against a 5% rise in premium, and repairer and builder capacity is tightening. A likely El Niño season will put further pressure on affordability and profitability, and with the Brisbane Olympics set to worsen already tight supply and labour, home building costs are yet to peak. The insurers that take cycle time and cost out of claims will protect margin; the rest will be forced back to price.
Large technology programs are running over budget and behind time. Major insurers are still working through large transformation and system replacement projects, many significantly over budget and behind their planned timeframes. We see this as closely linked to process and requirements: when these transformations are business-led, the outcome is significantly different. Our team at CXO2 specialises in process optimisation (EAR – eradicate, automate or relocate), designing future-state processes before technology is implemented.
The vehicle mix is shifting to EVs and Chinese manufacturers. Continued imports of lower-cost EVs from China are driving more total losses and hard-to-find parts, and vehicles are becoming more complex to repair.
Most leaders have commenced their FY27 plans and are now focused on execution: delivering the technology programs already under way, embedding the change and protecting margin through the next renewal cycle. The Bridge International continues to invest in our five core practices so we can support you through that work.
Below are the insights from the quarter. If any of these themes are front of mind for your organisation, or you would simply like to compare notes, please reach out.
We would welcome the opportunity to connect, grab a coffee and continue the conversation.
FY26 market review
Premium grew. Underwriting margins narrowed
$72.6bn
Direct premium written in FY26, up 3.6%. Almost all of the increase came from price.
93.8%
Net combined ratio, up 2.0 points. The underwriting result fell from $5.6bn to $4.5bn.
100.2%
Home net combined ratio, up from 92.8%. Home claims cost per policy rose 22% against a 5% rise in premium.
91.0%
Motor net combined ratio, improved from 92.6%. Motor premium rose 10% per policy, in line with claims.
Source: APRA Quarterly general insurance performance statistics, June 2026 (released 27 August 2026), direct business, four quarters to 30 June 2026.
GWP growth by APRA class, FY25 to FY26
Direct business, written premium. Brackets show FY26 GWP. Excludes inwards reinsurance and consumer credit ($35m).
Source: APRA Quarterly general insurance performance statistics, June 2026. The Bridge International analysis.
Net combined operating ratio by APRA class, FY25 and FY26
Earned premium basis, AASB 17, after reinsurance, direct business. Excluded: CTP (APRA suppresses its reinsurance) and consumer credit,
mortgage, other accident, other direct and travel (a suppressed quarter in the source). Above 100% is an underwriting loss.
Source: APRA Quarterly general insurance performance statistics, June 2026.
Premium growth in personal lines drove most of the market's growth in FY26. Motor and home delivered almost 90% of the increase. Most commercial classes went the other way, with GWP falling as new capacity and competition pushed average premiums down.
Home profitability deteriorated, with the net combined ratio moving above 100%. Natural perils in Queensland and building cost inflation were the main drivers. The pressure on repair costs is unlikely to ease: construction for the Brisbane 2032 Olympics will tighten the trades market further and keep claims cost inflation in home above premium growth.
Results Season
IAG, Suncorp and QBE
Both domestic majors grew premium and held underlying margins. Both reported lower statutory profit after natural perils ran above allowance. QBE reports on a calendar year, so its latest numbers are a half year.
IAG FY26 | Suncorp FY26 | QBE 1H26 | |
Gross written premium | A$18.4bn, up 7.6% (about 4.5% excluding RACQ) | A$15.4bn, up 2.7% | US$15.1bn, up 6% |
Underlying margin | 15% insurance margin | 11.8% underlying ITR | 92.8% combined ratio |
Reported profit | A$1.02bn, down 25% | A$1.03bn, down from A$1.82bn | US$1.03bn, up 4% |
Natural perils | A$114m over allowance | A$254m over allowance | US$72m under allowance |
Guidance | FY27 GWP growth 5% to 8% | FY27 GWP growth 3% to 5% | CY26 combined ratio about 92.5% |
Sources: IAG FY26 results, 13 August 2026. Suncorp Group FY26 results, August 2026. QBE 1H26 results, August 2026. Currency as reported by each insurer.
IAG grew 7.6% with the first contribution from RACQ Insurance. Underlying insurance profit rose 2.3% to $1.58bn and statutory profit fell 25% on higher perils costs. On 23 September the ACCC determined against IAG's acquisition of RAC Insurance in Western Australia; IAG is lodging a public benefits application.
Suncorp grew 2.7%, with consumer up 5.8%. Natural hazards cost $2.02bn against a $1.77bn allowance across 18 declared events. The group returned $400m through a buyback in FY26 and has announced up to $250m more. Suncorp now reports three quarters of sales online and 3.3 million AI chatbot conversations.
QBE grew 6% in constant currency with its combined ratio steady at 92.8% and a 17.7% return on equity. Australia Pacific premium fell 1% and its combined ratio rose to 88.2% after the January bushfires. Full year guidance was reaffirmed.
FY27 Outlook
The 5 Trends Reshaping Property & Motor Claims in Australia
Claims Transformation
Last month David McDonald, Executive Director at The Bridge International, published an article on the outlook and trends reshaping property and motor claims in Australia. His starting point is that many of the challenges facing insurers in FY27 are not new; what is changing is their scale, complexity and impact on customer outcomes.
After several years of claims inflation, labour shortages and severe weather events, David argues that the Australian claims environment continues to evolve rapidly, and that FY27 will reward the insurers that get ahead of it.
The five trends David identifies as having the greatest impact on Property and Motor claims in FY27 are:
1. Repair cycle times remain under pressure
2. Builder and repairer capacity is becoming a structural challenge
3. AI moves from experimentation to operational reality
4. Vehicle complexity is driving higher motor claim costs
5. Climate volatility is becoming a permanent claims driver
Change Readiness Assessment
How ready is your organisation for transformation?
With every major insurer running technology, claims and pricing programs at the same time, the difference between the leaders and the rest will be decided less by the strategy on the page than by whether people, processes and partners can actually absorb the change.
Most change programs don't fail loudly. They fail quietly, in the gap between what leadership believes and what is true on the ground. The Bridge Change Readiness Assessment is designed to close that gap before it costs you.
It takes three minutes and gives you an honest read on the five foundations that carry a change: alignment, vision, stakeholders, culture and communication. You get a score for each, and a clear view of where to focus first.
Process Optimisation, Technology and AI Enablement
Launch of CXO2 Process Optimisation, Technology and AI Enablement
Australia and New Zealand have a serious productivity problem. After two decades and billions of dollars sunk into digital platforms and enterprise technology, many organisations are still not seeing the operational gains, service improvements or workforce productivity they were promised.
To address the execution problem CXO2 has launched a new practice for clients “Process Optimisation & Technology Enablement”. This practice will help organisations turn transformation and technology investment into measurable productivity, performance and customer outcomes. CXO2 is part of The Bridge International group, one of Australia’s fastest growing management consulting boutiques.
About The Bridge International
The Bridge International is a trusted, alternative, innovative and purpose driven management consultancy operating in Australia, New Zealand and internationally. It is a values and purpose-driven organisation headquartered in Sydney, with teams in Queensland, Victoria, and South Australia. Their vision is clear: to become the most trusted professional services consultancy in our chosen markets.
The Bridge International's leadership team brings deep C-suite experience, having walked in the shoes of their clients. This practitioner-first approach, combined with strong consulting capability, enables them to quickly define the problem and design pragmatic, fit-for-purpose solutions that are actionable and effective, not theoretical.
Clients trust The Bridge International to provide honest advice and work as an extension of their team, delivering measurable results and strong returns on investment. The company's fair-value model reflects its fast-track approach, lower overheads, and commitment to having senior experts on every assignment.
The Bridge International's practices span: Strategy & Corporate Development, Customer & Operations, Leadership, Culture & Capability, Insurance, Program Delivery & Embedment. The range of services offered enables the company to support a wide range of client needs, providing a bridge between strategy and execution, embedding sustainable solutions and transferring knowledge so that clients succeed over the long term.
About CXO2
CXO2 is The Bridge International group's specialist customer experience and service transformation business. CXO2 works with boards and executive teams to improve enterprise performance by strengthening service and operational foundations, then translating strategy into execution that works.
CXO2's approach is pragmatic and commercial. We help organisations reduce avoidable contact, improve cost to serve, protect trust and lift productivity, while embedding change so outcomes stick. CXO2 works across industries as practitioners who have led and delivered in complex environments, partnering closely with teams to simplify complexity and turn customer intent into clarity and measurable impact.
About Bridge to Good
Bridge to Good is how The Bridge International turns business into good. Through its foundation, the company supports Lifeline, Cancer Council NSW, and Dementia Australia, helping create impact where it matters most.
