Australians are being hit with a massive insurance squeeze in early 2024 as increasingly profitable funds pass through huge price hikes on everything from home to health cover.

The industry claims the bill for several years of natural disasters and broader inflation across the economy is to blame for the latest cost-of-living pain, but some have called for an industry probe.

That includes former ACCC boss Allan Fels, who said on Sunday that the insurance industry should be investigated over the price hikes facing consumers while they post big profit jumps.

Finder insurance expert Gary Ross Hunter, said insurance has soared for lots of reasons over the past year and should moderate next year, but that families should expect higher prices moving forward.

That’s because bigger problems like climate change and the ageing population are likely to make it more expensive to insure people over the coming decades.

“The two costliest natural disasters in Australian history have happened in the past year and a half,” Ross Hunter said.

“Unfortunately unless we do something about the climate, insurance is going to keep getting more and more expensive.”

Why insurance is rising

In the shorter term, most of the biggest insurance products have soared in price over the past year – including home, vehicle and health cover.

ABS figures show insurance in general has risen 16.2 per cent over 2023, but Ross Hunter and his team have been analysing the market to reveal some more specific details.

He said home insurance has gone up about 25 per cent in the past 12 months, while car insurance is about 11 per cent more expensive (up 20 per cent since the start of 2021).

In each case the reasons are different, but there are similarities too, including for vehicle and home insurance premiums, which have risen on the back of natural disasters in 2021 and 2022.

Billions of dollars in home and vehicle damage was caused by severe flooding in Victoria, New South Wales and Queensland.

The insurance industry estimates that the flooding in February-March 2022 in Southeast Queensland and NSW cost about $5.87 billion.

Funds are now trying to recoup those costs through higher premiums for consumers everywhere, but particularly for people living in affected areas.

In the case of health insurance, a big factor has been a rebound in demand for elective surgery post-COVID and general cost increases across the medical industry over the past two years.

Funds post big profits

Curiously, however, big insurers have been posting strong profits lately on the back of the price rises for families.

Insurance giant QBE reported a $1.35 billion profit for 2023 late last month, up from $587 million last year.

Suncorp, meanwhile, reported a $582 million profit for the half year, up by about 5.4 per cent.

The results have sparked calls for a probe into the insurance industry, something Ross Hunter backed, saying the government already regulates how insurers change health insurance costs.

“Anything that has potential to make insurance more affordable, whether that requires an independent body or government intervention,” he said.

“It’s not going to get any cheaper otherwise and what it’s doing is forcing people in really vulnerable areas that are at high risk to get rid of their insurance.”