New data reveals widespread increase in living costs across Australian households

New data reveals widespread increase in living costs across Australian households | Insurance Business Australia

Insurance News

New data reveals widespread increase in living costs across Australian households

And insurance takes its share of the blame…

Insurance News

By
Roxanne Libatique

The Australian Bureau of Statistics’ (ABS) Living Cost Indexes (LCIs), a gauge of the fluctuating prices of goods and services affecting household budgets, saw a widespread increase in the December 2023 quarter – with insurance playing a significant role.

Across all household types, the quarterly surge in living expenses was primarily fuelled by upticks in insurance and financial services, as well as alcohol and tobacco expenditures. Housing costs also played a notable role in elevating expenses for all household types except self-funded retirees.

Quarterly living costs

Within the realm of insurance and financial services, significant increases were observed, particularly in mortgage interest charges and insurance premiums.

Insurance prices saw a marked rise, primarily attributable to heightened premiums across various sectors like motor vehicle, house, and home contents insurance. This surge reflects increased reinsurance costs, heightened occurrences of natural disasters, and elevated claims expenses.

Annual living costs

Over the past 12 months, all LCIs experienced an increase ranging between 4.0% and 6.9%. Notably, insurance and financial services, housing, and food and non-alcoholic beverages emerged as the primary contributors to rising living costs across various household types.

The surge in insurance premiums, alongside escalating housing expenses and higher food costs, has also led to a notable spike in annual living expenses. However, measures such as increases in Commonwealth Rent Assistance have partially alleviated the impact of rising rents on households.