Premium affordability, cybersecurity and labour shortages are the three biggest challenges facing Australian insurers this year, Gallagher Bassett’s annual industry survey has found.

The results “reveal a reshaping of insurer priorities”, according to the global Carrier Perspective: 2026 Claims Insights report.

Insurers are changing coverage limits and terms, and enhancing risk assessments, the claims management group says.

Gallagher Bassett’s Australian chief client officer and deputy CEO Pete Diskin says 70% of insurers here reported higher costs per claim and a surge in claim frequency, and half plan to increase premiums.  

“Sustaining growth under these conditions requires that insurers implement proactive cost management strategies. How they approach pricing, claims forecasting and triage will determine profitability,” he said.

Premium affordability and insurability is the “foremost challenge” in Australia, with 22% of local respondents ranking it their top concern.

“This reflects the compounding pressures of increased compliance costs, broader macroinflationary pressures, catastrophic events, and financial stress on businesses and households that are making coverage increasingly difficult to secure for certain industries and risk profiles,” the report says.  

“Compounding pressures from claims inflation and tightening capacity are making coverage increasingly difficult to secure across multiple sectors.”  

Claim-related cost escalation in Australia is becoming “a structural challenge, driven by an interplay of social inflation, technological advancements, climate-related risks and medical inflation”.  

Data and cybersecurity ranks second (20% of respondents) among the leading challenges.

Nearly three-quarters of Australian insurers have adopted generative AI for fraud detection. 

But Gallagher Bassett says the “path forward will require more than technological adoption – it will demand a holistic, data-driven approach that integrates proactive claims handling, precise risk assessment and tailored underwriting strategies”.

Globally, attraction and retention of talent is the top challenge, cited by 18% of respondents.

Australian insurers continue to report impacts to operational capacity and difficulty finding qualified candidates.  

Employers are reviewing compensation and investing more in training.

The report says talent constraints in Australia represent “an immediate operational challenge and a strategic vulnerability”, with 75% of insurers reporting increased difficulty finding qualified candidates.

Claims management and adjusting and specialised case management face “acute” shortages.

“Workforce and cyber challenges are being experienced across all surveyed regions,” Mr Diskin said.

“It is clear that both global and regional insurers are looking for ways to balance the interwoven imperatives of cost, cybersecurity and people.”  

Get the report here.