The Australian Securities and Investments Commission (ASIC) has set out a 2026 risk agenda that places insurers, superannuation trustees, and other financial institutions under closer scrutiny as economic, technological, and climate‑related pressures build across the system. Releasing its Key Issues Outlook 2026, ASIC said it is monitoring “major shifts” across Australia’s financial system as cost‑of‑living pressures, higher debt levels, and geopolitical tensions contribute to volatility.
The regulator noted that expanding private markets, rapid digitalisation, and diverging global regulatory settings are changing how financial products are distributed, governed, and supervised. ASIC chair Joe Longo said the outlook is designed to direct attention to areas where risks are most likely to emerge and to indicate where the regulator will focus its efforts to support trust and confidence in the financial system. The issues, which are not ranked, apply across all sectors ASIC oversees, including general insurance, life insurance, superannuation, banking, and investment markets.
One key theme in the outlook is the wider access of retail clients to private credit and other private market products. ASIC noted that investment thresholds can be as low as about $2,000, with access often provided through investment platforms and, in some cases, superannuation. The regulator said these products are generally less transparent and in some cases more complex, which can increase the likelihood of mis‑selling, unsuitable product selection, and decisions being made without adequate disclosure. ASIC referred to its November 2024 work on private markets, which found limited regulatory reporting outside superannuation and constrained visibility over underlying risks.
ASIC also raised concerns about consumers reducing their retirement savings by moving from superannuation into high‑risk investments. It identified aggressive marketing, lead‑generation and standardised “cookie‑cutter” advice models as factors behind switches into complex structures, including some managed investment schemes, that may not be appropriate for typical members. The regulator is working with government and consumer bodies to address legal and regulatory gaps and is running education initiatives to help Australians identify risks to their retirement balances. ASIC currently has 12 court cases underway related to the Shield and First Guardian matters.
Operational performance in superannuation remains a central focus. ASIC cited member service issues such as delays in processing claims, limited support, weaknesses in IT infrastructure and cyber resilience, and increased fraud and scam risks as key operational concerns for 2026. Such failures can result in financial loss and added stress for members already facing difficult circumstances, with implications for confidence in the superannuation system. ASIC noted that almost three million Australians are expected to become eligible to access their superannuation over the next decade, with more than $750 billion projected to move from accumulation into retirement, increasing operational demands on trustees and administrators.
For insurers, ASIC highlighted claims handling, particularly after extreme weather events. Recent disasters in Victoria and Queensland have placed pressure on insurers managing concurrent and severe events, with delays, errors, and poor communication identified as sources of consumer harm. ASIC has commenced court proceedings in relation to serious claims handling failures and indicated that it will continue to pursue enforcement action where warranted as catastrophe volumes and costs increase demands on claims operations.
Advanced technology and AI‑enabled conduct also feature in ASIC’s outlook. The commission said consumers are increasingly affected by automated decisions, AI‑driven interactions, and scams amplified by digital tools. The rapid adoption of AI is allowing new forms of conduct that exploit behavioural biases, while ASIC’s research points to varying levels of maturity in firms’ AI governance and risk controls. Cyberattacks, data breaches, and shortcomings in crisis preparedness were identified as ongoing threats to market confidence. Rising calls to the Australian Cyber Security Hotline, higher incident response activity and more threat notifications have, in ASIC’s view, underscored the need to lift cyber and operational resilience. The regulator is urging boards and licensees to maintain risk frameworks, test operational and crisis responses, and address weaknesses in third‑party service arrangements.
ASIC also pointed to regulatory gaps at the edge of the financial system, including in digital assets, payments, and business models using AI. Rapid innovation by firms less familiar with financial regulation is contributing to risks around unlicensed advice, misleading conduct, and the use of unclear boundaries. ASIC noted that decisions on whether new product or service classes should be brought within licensing regimes rest with government, but said clarity on licensing expectations and active perimeter oversight will remain priorities in 2026.
ASIC described the ASX’s CHESS system as critical national infrastructure and warned that a failure or significant outage – arising either from continued reliance on ageing infrastructure or from the implementation of its replacement – poses material risks for market stability and investor confidence. The December 2024 outage was cited as a recent example of those vulnerabilities. On reporting and assurance, ASIC reiterated concerns about the quality of financial reporting, sustainability reporting, and audits. In superannuation financial reports, the regulator has observed inconsistent investment disclosures, limited transparency around some expenses, and insufficient audit evidence for valuations. As mandatory sustainability and climate‑related reporting expands, ASIC sees a risk of misleading, incomplete, or weakly supported disclosures. ASIC also pointed to increased risk appetite in the banking sector as competitive pressures narrow net interest margins. It said it is monitoring conduct that pushes regulatory boundaries in ways that may lead to unfair investor losses or consumer harm, including relaxed credit assessments, larger or unsuitable loans, product and pricing changes for lower‑margin customers, and marketing that directs borrowers toward higher‑risk products.
ASIC’s assessment of AI, cyber, operational, and catastrophe‑related risks broadly aligns with Sedgwick’s 2026 global risk study, released on Dec. 16, 2025. Sedgwick’s forecasting report draws on internal research, trend analysis, and a survey of Fortune 500 executives to identify pressures shaping risk, claims, and workplace resilience. On AI, Sedgwick reported that 70% of surveyed organisations have AI risk committees in place, but only 14% consider themselves fully prepared for AI deployment, while 31% say they are struggling to keep pace or are behind. Regulatory uncertainty is identified as a key challenge as AI reshapes claims operations and broader risk functions.
Catastrophe risk and recovery are another core theme. According to the survey, 76% of organisations expect moderate to severe insurance pressure from catastrophe challenges. In addition, 75% report some degree of labour friction linked to immigration‑related constraints, and 11% face severe labour access challenges. Sedgwick said extreme weather, property exposures, and labour shortages are increasing costs, extending timelines, and adding complexity across industries. Supply chain disruption is being affected by geopolitical instability, trade policy shifts, regulatory change, and global events. In the study, 66% of respondents reported negative impacts from US trade policies, 65% cited economic and geopolitical volatility as their primary supply chain concern, and 38% identified cyber security as a structural vulnerability in supply chains.
Sedgwick’s research also points to workforce and leadership issues as ongoing constraints. Among surveyed executives, 32% cited changing employee expectations as the leading talent challenge, 47% reported difficulties transferring leadership skills, and 20% named VR/AR as a priority tool for reducing workplace injuries. Only 3% of organisations reported being fully prepared for all global risks. Geopolitical instability was identified as the top risk by 56% of respondents, the single highest concern across regions and sectors, while 50% cited cyber as a critical exposure. For Australian insurance professionals, ASIC’s domestic outlook and Sedgwick’s global findings together indicate a 2026 environment in which claims handling, operational resilience, AI and cyber governance, product design, and regulatory perimeter management will be central to both supervisory engagement and business planning.
