Australia’s personal accident and health (PA&H) insurance market is projected to continue expanding through 2030, with medical cost inflation, demographic trends, and regulatory oversight influencing growth, pricing, and margins across the sector.
GlobalData estimates that Australia’s PA&H insurance industry will grow at a compound annual growth rate of 4.6% between 2026 and 2030, with direct written premiums rising from $35.7 billion (US$23.5 billion) in 2026 to $42.8 billion (US$27.7 billion) by 2030. The firm’s Global Insurance Database shows that the segment recorded annual growth above 5% from 2022 to 2025 and is expected to post annual growth above 4% through the end of the decade.
According to GlobalData, this trajectory is linked to increased awareness of climate and health risks, changes in regulation that support transparency, and wider use of digital and embedded distribution channels. Rising healthcare costs and higher out-of-pocket payments are also influencing demand for private cover, making PA&H a significant component of general insurance premiums in Australia. “The expansion of PA&H insurance by 5.3% in 2025 reflects stable demand and pricing resilience, while 2026 growth aligns with moderating yet steady premium uplift, alongside continued consumer focus on health, wellness, and income protection benefits as insurers refine product design and service models,” said Swarup Kumar Sahoo, senior insurance analyst at GlobalData.
Sahoo noted that more Australians are turning to private health insurance to manage rising health expenses and limit out-of-pocket exposure. While several general insurance classes are experiencing a softening rate cycle, health insurance premiums have continued to increase, reflecting the interaction between affordability constraints and demand for broader protection. Figures from the Department of Health, Disability, and Ageing indicate that private health insurance premiums increased by an average of 3.73% in 2025. An ageing population and a higher prevalence of chronic and complex conditions are expected to support further increases in healthcare and insurance costs in 2026 and beyond.
Following premium rate applications lodged by insurers in November 2025, the department is consulting with the Australian Prudential Regulation Authority (APRA) and private health insurers before confirming 2026 changes. Early indications point to an average premium rise of around 4% in 2026, largely reflecting higher medical costs in 2025 and ongoing demand for private health coverage.
Industry analysis suggests that the upcoming rate cycle may be the first in five years in which private health premium increases move broadly in line with health-related inflation rather than consistently outpacing it. Research by Money.com.au indicates that from 2005 to 2020, health insurance premiums rose on average 1.1 percentage points above health inflation each year. Since 2021, premium adjustments have been below health CPI, with the gap narrowing from 2.6 percentage points in 2023 to 1.1 percentage points in 2025. The forecast 2026 premium changes are expected to reduce this gap further.
Climate-linked health risks are adding another dimension to PA&H risk assessment. “The risk of heatwaves is prominent in Australia, leading to increased mortality in urban areas and putting pressure on health expenditure and insurance claims. This has increased the need for resilient coverage solutions, particularly for vulnerable communities, and may influence product innovation across PA&H lines,” Sahoo said.
Technology and data capabilities are becoming more central to how PA&H products are distributed and administered. Digital platforms and embedded offerings are increasingly used to distribute health-related cover at the point of sale, while insurtech investment is contributing to the development of operating infrastructure for brokers and underwriters.
AI tools are being applied in policy administration, claims processing, and risk analytics functions. Insurers are also using digital channels to extend telehealth and mental health services, in response to shifts in healthcare delivery and consumer expectations. Sahoo said these tools are expected to play a larger role from 2026 to 2030 as PA&H insurers adjust benefits, refine risk selection, and seek to stabilise loss ratios, while attempting to keep cover accessible for price-sensitive segments.
According to a report by S&P Global Ratings, ongoing medical cost inflation associated with staffing, facilities, and advanced procedures continues to put upward pressure on claims. At the same time, demand for private health insurance is supported by population growth and a sustained preference among many policyholders for access to private care.
The report notes that regulatory scrutiny of premium increases is likely to remain a consistent feature of the operating environment. While rising claims may compress margins, the sector’s capital position is described in the report as robust, supporting insurers’ ability to manage volatility in claims and investment returns.
A gradual shift toward same-day and out-of-hospital care models is expected to affect claims costs through shorter length-of-stay and related expenses. For PA&H insurers, the interaction of changing care pathways, digitalisation, and regulatory oversight is set to influence pricing strategies, product structures, and capital allocation decisions over the remainder of the decade.
Sahoo said: “Australia’s PA&H market is on a firm growth trajectory, as climate, health risks, and regulatory forces reshape risk and reinforce demand for comprehensive protection. With sharpening competition, elevated claims in select health verticals, and accelerating digital/embedded distribution models, insurers that balance affordability, coverage innovation, and customer-centric service will be best positioned to capture growth and strengthen resilience in the coming years.”
