Australian insurers are grappling with three immediate pressures heading into 2026: rising premium costs and shrinking insurability, ongoing cyber and data risks, and increasing difficulty hiring and retaining skilled workers, according to industry feedback cited in Gallagher Bassett’s upcoming The Carrier Perspective: 2026 Claims Insights report.
At the top of the list is “premium affordability and insurability,” which has become the leading concern for insurers after ranking sixth in 2025. Respondents linked this shift to rising inflation, increasing climate-related losses, and regulatory pressures, all of which are affecting how premiums are priced and what risks can be covered. Insurance Council of Australia data shows insured catastrophe losses of about $2.61 billion in 2023–24 and $1.97 billion in 2024–25, with single events such as Ex-Tropical Cyclone Alfred generating more than $1.5 billion in claims.
Such losses have placed sustained pressure on premiums, increasing the risk of customers dropping cover.
Cyber and data security remains a major concern, holding its position as the second most significant challenge for a second consecutive year. Figures from the Office of the Australian Information Commissioner show that in the January–June 2025 period, malicious or criminal attacks accounted for 59% of reported data breaches, with an average of more than 10,000 individuals affected per incident. As insurers rely more heavily on digital and cloud-based systems, the scale of potential exposure continues to grow.
Workforce issues have also moved higher up the agenda. The difficulty of attracting and retaining employees is now the third-ranked challenge for 2026, up from seventh in the previous year. Industry respondents pointed to changing workforce expectations and skills shortages as key issues, particularly as insurers become more digital and customer-focused.
The survey results also show a shift from last year’s priorities. In 2025, “changing customer expectations” ranked as the top business challenge, but concerns around affordability, cyber risk, and talent have since taken precedence as financial, technological, and labour pressures intensify across the sector.
