For Australian business owners, navigating the world of insurance can feel like decoding a foreign language. One term that pops up frequently in policy documents and annual reports is written premium. While it might seem like just another piece of industry jargon, understanding written premium can help you make smarter decisions about your coverage and keep a closer eye on costs—especially as insurance markets shift in 2025.
What Is Written Premium?
Written premium refers to the total amount of premiums an insurance company records for policies issued during a specific period, regardless of whether the premium has been paid in full or if the coverage period has begun. In essence, it’s the gross value of all new and renewed policies written on the insurer’s books before deductions for commissions, cancellations, or adjustments.
- Key distinction: Written premium is different from earned premium (the portion of premium ‘earned’ as the insurer provides coverage) and collected premium (the actual cash received).
- Example: If your business renews its public liability insurance for $5,000 in March 2025, that full amount is counted as written premium for the insurer in March, even if you pay monthly and coverage extends into 2026.
Why Written Premium Matters in 2025
With climate risk, inflation, and regulatory changes shaping the Australian insurance market, written premium has become a hot topic. Here’s why it matters for your business:
- Market Health: Written premium is a key indicator of insurer growth and market competition. A surge in written premiums can signal rising demand or higher policy prices—a trend seen in 2025 as insurers adjust for increased claims from extreme weather events.
- Pricing Transparency: Insurers use written premium figures to assess risk pools and set future rates. If the industry’s written premium jumps significantly, expect potential price hikes or policy tightening.
- Regulatory Oversight: APRA (Australian Prudential Regulation Authority) closely monitors written premiums to ensure insurers remain solvent and can pay out claims, especially as 2025 brings stricter reporting standards and consumer data transparency initiatives.
Written Premium in Action: Real-World Examples
Let’s bring the concept to life with some local scenarios:
- Small Business Insurance: In 2025, many small businesses in Queensland renewed their commercial property insurance at higher rates due to increased cyclone risks. The spike in written premium across the region prompted insurers to reassess risk models and, in some cases, introduce new excess levels or policy exclusions.
- Car Insurance Trends: With more electric vehicles on Australian roads, some insurers reported a 12% increase in written premium for motor policies compared to 2024. This reflected both higher average premiums for EVs and a greater volume of new policies written as manufacturers and brokers partnered to offer bundled insurance deals.
- Flood-Prone Areas: Recent regulatory changes require insurers to clearly disclose how written premium is calculated for properties in high-risk zones. This shift, effective July 2025, aims to help consumers understand premium increases and compare options when shopping for home and contents insurance.
How Written Premium Can Influence Your Insurance Choices
Knowing how written premium works allows you to:
- Benchmark Costs: Track how your premiums compare to wider industry trends. If your sector sees a sharp rise in written premium, it might be time to review coverage or negotiate terms.
- Negotiate Smarter: Insurers may have more flexibility with pricing if they’re trying to grow their written premium in certain segments. This can be especially true for newer types of cover (like cyber insurance) or in under-served regions.
- Understand Refunds/Cancellations: If you cancel a policy early, the insurer may refund only the ‘unearned’ portion of your premium, not the full written premium. Knowing this distinction can help avoid surprises at renewal or cancellation time.
2025 Policy Updates and What to Watch
Several changes are reshaping how written premium is reported and managed in Australia this year:
- Stricter APRA Reporting: From March 2025, all general insurers must provide more granular data on written premium by region and risk type, improving transparency for business owners and brokers.
- Green Insurance Products: New guidelines encourage insurers to separately report written premiums for sustainability-linked policies, reflecting growing demand for ‘green’ commercial and property insurance.
- Digital Policy Management: Expect to see more online dashboards from major insurers, allowing businesses to track written premium, coverage levels, and claims history in real time.
Takeaway: Make Written Premium Work for Your Business
Written premium is more than just a line in your policy paperwork—it’s a window into market trends, insurer priorities, and your own cost structure. With 2025 bringing new challenges and opportunities in the insurance landscape, understanding this metric gives you a valuable edge when buying, renewing, or negotiating cover.
