Australia’s largest insurers now link relentless premium increases to two key pressures, more frequent and severe natural disasters and steep inflation in construction and repair costs. Their warnings land as the Albanese government pushes the industry to spell out exactly why policies are getting more expensive and what is driving each increase. Regulators are also circling, with the Australian Securities and Investments Commission preparing to review the insurance industry’s code of conduct and how it protects customers.
Insurers point to cost blowouts in rebuilding homes, from labour to materials, as a major reason home insurance is locked into what they call “double-digit” premium growth. One major group, which operates brands such as NRMA Insurance and CGU, argues that intense construction cost inflation has fundamentally shifted the economics of home cover. Executives say these pressures are not a short-term spike but a structural problem that could persist “for some time”. They also stress that the industry’s own expenses are only part of the picture, with external economic forces doing most of the damage.
Industry leaders suggest meaningful relief is tied to broader reforms in how Australia manages property-related inflation and disaster risk, rather than quick regulatory fixes. Government scrutiny and consumer frustration are set to collide with insurers’ insistence that pricing must reflect actual risk and rebuilding costs. That clash could shape future debates over disaster resilience spending, land-use planning and how much financial risk should be shifted away from individual policyholders.
