Key Challenges Facing Australian Insurers in 2026

According to Gallagher Bassett's forthcoming report, 'The Carrier Perspective: 2026 Claims Insights,' premium affordability has surged to the top of insurers' concerns, climbing from sixth place in 2025. This shift is attributed to factors such as rising inflation, increased climate-related losses, and regulatory pressures, all of which are impacting premium pricing and insurability. Data from the Insurance Council of Australia indicates insured catastrophe losses of approximately $2.61 billion in 2023-24 and $1.97 billion in 2024-25, with events like Ex-Tropical Cyclone Alfred alone generating over $1.5 billion in claims. Such substantial losses have intensified pressure on premiums, raising the risk of customers reducing or cancelling their coverage.

Cybersecurity remains a significant concern, maintaining its position as the second most critical challenge for the second consecutive year. The Office of the Australian Information Commissioner reports that in the first half of 2025, malicious or criminal attacks accounted for 59% of reported data breaches, affecting an average of over 10,000 individuals per incident. As insurers increasingly rely on digital and cloud-based systems, their exposure to cyber risks continues to expand.

Workforce issues have also escalated, with the difficulty of attracting and retaining employees now ranking third among industry challenges, up from seventh in the previous year. Respondents highlight changing workforce expectations and skills shortages as key issues, particularly as insurers become more digital and customer-focused.

These evolving challenges underscore the need for insurers to adapt their strategies to maintain competitiveness and effectively manage emerging risks in the dynamic Australian insurance market.