Australia’s property insurance market is set to register a compound annual growth rate (CAGR) of 7.5%, with direct written premiums (DWP) projected to grow from AUD27.4 billion ($18 billion) in 2026 to AUD36.6 billion ($23.7 billion) in 2030.
GlobalData’s Global Insurance Database indicates that the Australian property insurance market grew by 5.8% in 2025, supported by strong premium momentum and elevated natural hazard exposure. The annual growth is forecast to increase to 5.9% in 2026 as pricing normalises and structural risk, targeted relief, and technology-led efficiency underpin expansion.
Katam Prasanth, Senior Insurance Analyst at GlobalData, comments: “Australia’s property insurance sector is shifting from a period of sharp premium increases to more stable conditions, while the main pressures remain. Exposure to natural hazards and higher claims costs continue to influence pricing. Initiatives such as the cyclone reinsurance pool, stronger governance and transparency, and faster adoption of digital tools in underwriting and claims are expected to strengthen resilience through 2030.”
Australia remains among the most catastrophe-exposed insurance markets on a per-capita basis, with recurring floods, cyclones, and severe convective storms sustaining elevated insured losses.
According to the Insurance Council of Australia (ICA), as insured catastrophe losses declined 25% from AUD2.61 billion ($1.8 billion) in FY2023-24 to AUD1.97 billion ($1.4 billion) in FY2024–25, claim volumes eased by only 7%, indicating continued frequency pressure across short-tail lines. In parallel, rebuild-cost inflation and higher repair bills continue to lift claim severities, feeding through to premium requirements and underwriting recalibration.
Prasanth adds: “Reflecting these dynamics, the premiums are estimated to moderate in 2026 as pricing conditions gradually ease from an exceptionally hard cycle.”
According to the Australian Reinsurance Pool Corporation, policy intervention is already influencing pricing in the most exposed regions. The government-backed cyclone reinsurance pool has delivered measurable affordability benefits, including average premium reductions of up to 39% for households and 31% for small and medium-sized enterprises in the highest-risk zones, alongside improved quote success rates. This supports broader coverage uptake and narrows protection gaps in cyclone-prone communities while enabling insurers to maintain risk-appropriate capacity.
Prasanth continues: “Improved hazard defenses and mitigation incentives can reduce severity over time and support more sustainable insurance availability, even as climate-driven weather volatility remains a structural feature of the risk landscape.”
Looking beyond the near-term pricing cycle, large-scale public investment is expected to influence market stability and long-run insurability. The government has committed AUD9 billion ($6.3 billion) in climate adaptation funding through 2030, targeting flood, bushfire, and cyclone mitigation.
Additionally, insurers are scaling automation and AI in claims and underwriting to improve surge responsiveness, reduce cycle times, and lower loss-adjustment expenses. The sector is also expanding AI-enabled counter-fraud collaboration to reduce organized fraud and claims leakage.
Prasanth concludes: “Australia’s property insurance market is expected to keep growing through 2030 as natural hazard exposure and rising claims costs continue to drive premiums, even as pricing stabilises. While catastrophe losses have eased, claims frequency and rebuild-cost inflation remain elevated, sustaining underwriting pressure. Government measures and adaptation spending should improve affordability and insurability in high-risk areas, while AI and digitalisation enhance efficiency and resilience.”
Notes: This release is written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts
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