The life insurance market in Australia is projected to grow from AUD26.2 billion ($17.3 billion) in 2025 to AUD30.5 billion ($19.8 billion) in 2029, registering a compound annual growth rate (CAGR) of 3.9% in terms of gross written premiums (GWP), according to GlobalData, a leading data and analytics company.
GlobalData’s Australia Life Insurance Report indicates that the country’s life insurance market is estimated to register an annual growth of 2.9% in 2025, supported by economic recovery, an aging population, increased health awareness, and escalating cost of living. Additionally, the recovery in household disposable income and consumption is expected to boost demand for life insurance products.
According to GlobalData, the decline of 24.4% in the life insurance GWP in 2024 is due to the change in reporting requirement after the implementation of International Financial Reporting Standards (IFRS) 17.
Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: “The Australian life insurance market is at a pivotal juncture, with demographic shifts and economic pressures shaping the landscape. Insurers must navigate these challenges while delivering value to policyholders through tailored products and services.The emphasis on affordability and accessibility will be crucial as the industry adapts to the changing needs of consumers.”
One of the most significant factors influencing the growth of the life insurance market is rising medical inflation. According to the Australian Bureau of Statistics, health inflation registered a 4.1% increase in Q1 2025 compared to the previous year. This surge in medical expenses is expected to elevate the costs of claims and health benefits, compelling insurers to revise their pricing models.
The aging population presents both challenges and opportunities for the life insurance sector. The proportion of individuals aged 65 and above is projected to exceed 22% by 2026, compared to 16% in 2020, according to the University of Sydney. The Aged Care Act 2024, which highlights the government’s commitment to addressing the needs of older Australians, is expected to enhance awareness of financial planning for aging populations, supporting demand for life and health insurance products.
The GWP of personal accident and health (PA&H) insurance, which grew at a CAGR of 3.8% during 2020-24, is expected to grow at a CAGR of 4.6% during 2025-29.
The ongoing cost-of-living crisis in Australia, with rising interest rates and inflation, is straining household budgets. Many Australians are reconsidering their financial commitments, including life insurance, which is expected to put significant pressure on the life insurance market. A report by the Cost of Living Index indicates that 71% of Australians are concerned that the escalating cost-of-living crisis may impede their ability to maintain or acquire life insurance.
Swarup continues: “However, the crisis highlights the critical need for financial safety nets, prompting insurers to adapt, innovate, and offer more flexible and affordable products to meet the evolving needs of consumers seeking financial security in uncertain times. The increasing prevalence of policy cancellations due to affordability concerns may push insurers to enhance customer engagement and retention strategies.”
Sahoo concludes: “The outlook for the life insurance market in Australia remains positive, driven by a combination of demographic shifts, economic factors, and innovation in insurance products. Insurers are expected to focus on developing flexible and cost-effective solutions to meet the needs of a diverse consumer base. The demand for life insurance is expected to grow, driven by a heightened awareness of financial security and the need for comprehensive coverage in an uncertain economic landscape.”
