Home and contents insurance quotes across Australia’s five largest capital cities rose an average of $373.93 – or 14.78% – in the 12 months to June 2026, according to Compare the Market. For insurance professionals, the comparison platform data is context rather than insight. The structural picture – drawn from Australian Prudential Regulation Authority (APRA) underwriting data, Insurance Council of Australia (ICA) catastrophe loss figures, Actuaries Institute affordability research, and Australian Financial Complaints Authority (AFCA) complaints volumes – is where the material market intelligence sits.
Gross written premium for the householders class grew from $3.82 billion in the December 2023 quarter to $4.49 billion in December 2025 – a 17.4% increase in two years – yet in four of the 10 quarters captured in APRA’s dataset, the householders insurance service result was negative, with losses reaching $681 million in December 2023 and $1.08 billion in December 2025, according to APRA’s Quarterly General Insurance Performance Statistics, released May 29, 2026. Sustained premium growth without consistent underwriting profit frames the current pricing cycle as a structural catch-up exercise rather than a market generating excess returns.
The ICA attributes persistent cost pressure to building material inflation. Inflation impacts since 2021 have been more pronounced in the building and motor repair sectors than in the economy generally, pushing up the cost of repairs and the replacement of damaged assets. An ICA spokesperson told Insurance Business that building material costs have risen 40% since 2022. Compare the Market Economic director David Koch attributed premium increases to three factors: construction and labour cost inflation, catastrophe-driven claims, and insurer pricing behaviour. “The first is inflation – it’s driving up the cost of everything from materials to labour and transport. That all means it’s a lot more expensive to repair or rebuild a house in 2026,” Koch said.
Extreme weather generated $4.8 billion in insured losses in 2025 – up 727% on the previous year – with more than $4.1 billion coming from Queensland alone. Insurers handled 294,000 claims from declared extreme weather events, almost six times the prior year, with average costs per claim rising 39% to $16,471, according to the ICA’s April 2026 analysis. Insured losses from extreme weather stood at $2.35 billion in 2023 and $585 million in 2024, a volatility range that illustrates the challenge for actuaries pricing long-tail catastrophe risk from one year to the next.
GlobalData’s Global Insurance Database shows the Australian property insurance market grew 5.8% in 2025, with direct written premiums projected to rise from $27.4 billion in 2026 to $36.6 billion by 2030 at a compound annual growth rate of 7.5%, driven by structural climate risk and sustained demand for catastrophe cover. Annual growth is forecast to ease to 5.9% in 2026 as pricing conditions moderate following an extended hard cycle, though underlying cost drivers remain in place.
The most recent edition of the Actuaries Institute’s Australian Actuaries Home Insurance Affordability Index – covering the year to March 2024, the latest published data – shows the affordability problem accelerating well before the 2025 catastrophe year. The proportion of affordability-stressed households – those facing premiums exceeding four weeks of gross household income – rose to 15%, or 1.61 million households, up from 12% in 2023 and 10% in 2022. Affordability-stressed households spend an average of 9.6 weeks of gross income on home insurance, seven times more than non-stressed households.
The report’s lead author Sharanjit Paddam said: “While insurance remains generally affordable for 85% of households, it’s concerning that there’s now 1.6 million households struggling to afford to insure their homes, up from 1.24 million a year ago. This is because increases in premiums are outpacing wages growth. Unfortunately, we expect this will continue because of the overall increasing risk of natural disasters associated with climate change, which will continue to put upward pressure on premiums.”
The implications extend beyond household finances. An estimated 5% of Australian households with mortgages are experiencing insurance affordability stress, representing $57 billion of loan balances and 3% of all home loan assets. Given that these figures reflect conditions before 2025’s $4.8 billion catastrophe year and the further premium increases recorded in the 12 months to June 2026, the current stress level is likely higher. APRA’s March 2026 climate vulnerability assessment found that between 2010 and 2025, Australian home insurance premiums rose at an annual average rate of 7.2%, while wages grew at 3.1% annually.
The protection gap is a measurable consequence. Of roughly 242,000 dwellings assessed as facing severe to extreme flood risk, about 77% are not insured for flood – more than 186,000 homes – with seven in ten of those properties located in areas with incomes below the national average.
Motor insurance quotes rose an average of $193.63 across the five capitals in the year to June 2026, per Compare the Market, with Melbourne recording the largest increase at $285.03. The ICA’s Insurance Statistics Australia data, released June 4, 2026, provides the underwriting context behind that figure. Victoria recorded a 25% increase in motor theft claims and a 37% rise in incurred costs from 2024 to 2025. The state’s total bill – $243 million across more than 12,500 claims – exceeded the combined sum of all other states analysed. While Western Australia, South Australia, and Queensland each recorded reductions of 15%, 14%, and 12% respectively, theft claim frequency in Victoria rose 31%, climbing from 0.35% to 0.46% in metropolitan areas.
ICA CEO Andrew Hall said: “A car is stolen or broken into every 42 minutes in Victoria. This level of crime is not acceptable. Each year, Victoria’s numbers stand apart from the rest of the country, and that gap is widening. While every other state is effectively reducing car theft, in Victoria the volume of claims and the costs involved remain at unacceptable levels and that sustained pattern is what’s most concerning.” The geographic concentration of that risk – and its sharp divergence from every other state – has direct implications for underwriters and portfolio managers assessing Victorian motor book exposure.
AFCA’s complaints data, drawn from two separate reporting periods, points in the same direction. In the 2024-25 financial year, general insurance complaints rose 17% to 34,231, driven largely by add-on insurance and delays in motor vehicle claims handling. In the 2025 calendar year, AFCA received 111,373 complaints in total – a 14% increase and a record – with motor vehicle insurance generating 12,879 complaints, up 18%, and home building insurance generating 7,359 complaints. Delay in claim handling was the most complained-about issue across all financial services. Across both periods, AFCA noted that complaints about premium increases rose and encouraged insurers to more clearly explain premium changes, including the effects of external cost pressures.
Against that backdrop, the intermediated channel’s complaints profile remains contained. General insurance broker complaints represented approximately 0.8% of total complaints in the 2024-25 financial year, per the National Insurance Brokers Association of Australia’s (NIBA) analysis of AFCA Datacube data – a differential that points to the role brokers play in managing client expectations through a claims environment generating record dispute volumes industry-wide.
