Australia’s commercial insurance market has remained in soft territory through the first half of 2026 (H1 2026), with pricing continuing to ease across most lines and insurer appetite remaining broad, according to the latest Insurance Market Trends and Outlook report released by EBM Insurance & Risk on May 11. The report, which covers property, financial and professional lines, liability, and cyber insurance, describes a market shaped by heightened competition, expanded capacity, and stabilising reinsurance conditions – even as broader global pressures continue to weigh on insurer sentiment.
The Australian commercial insurance market has softened over the past 12 to 18 months, driven by several converging factors. Insurer profitability has improved since the COVID-19 era, reinsurance conditions have stabilised, and a global capital surplus has intensified competition, placing downward pressure on premiums across most classes. Underwriting results have also stabilised, with corrective pricing cycles winding down and loss ratios no longer requiring upward pricing pressure.
New entrants to the market – including a notable number of managing general agents and Lloyd’s capacity – have further expanded available options for buyers, particularly those with well-documented risk profiles. EBM noted, however, that while current conditions present opportunities, businesses should maintain a long-term view when assessing insurer relationships. The report flagged that insurer appetite can shift quickly if market conditions deteriorate, and that insurers who provided consistent support through harder market cycles may warrant continued consideration.
The property insurance market has continued to benefit from strong competition and an increase in underwriting capacity. Lower-than-expected natural catastrophe losses through much of 2025 and into early 2026, combined with insurer growth ambitions and a stable reinsurance backdrop, have contributed to a range of outcomes for property clients. Well-maintained properties with clean claims histories have generally experienced premium stability or reductions, greater insurer participation, and more flexibility on terms and limits. Properties in weather-exposed areas or with prior claims have seen more varied outcomes, including modest premium increases in some cases, though competition has contained the extent of those movements. EBM’s report highlighted that insurers are placing continued emphasis on accurate sums insured, risk mitigation measures, and complete risk submissions when assessing property risks.
Financial and professional lines have continued to soften in 2026, with expanded capacity and strong competition keeping downward pressure on premiums across directors and officers, cyber, professional indemnity, and management liability. Clients with sound governance frameworks, strong financial positions, and limited regulatory exposure have generally seen premium reductions, more competitive retentions, access to higher limits, and enhanced coverage terms. The report noted that multiple insurers are frequently willing to quote on well-managed risks in these lines.
Conditions vary by sub-class. In the D&O market, rate reductions have been common across many sectors, with some clients securing higher limits at no additional cost. The professional indemnity market has seen both local and Lloyd’s capacity expand, producing flat to modestly reduced rates for in-appetite professions. Employment practices liability has stabilised following several years of pressure, with flat to slightly reduced premiums for clients with favourable claims histories. Statutory liability has seen more cautious underwriting, with pricing reflecting exposure to workplace incidents and regulatory action. Crime and fidelity cover has remained broadly stable. Clients with exposure to insolvency risk, regulatory scrutiny, or complex professional liabilities have faced more conservative underwriting, though broader market competition has limited premium increases in most cases.
The general liability market has continued to favour buyers through 2026, with Australian-based insurers frequently delivering more competitive outcomes than international counterparts on pricing, deductibles, and coverage terms. Mid-market businesses with straightforward operations, limited contractor exposure, and sound risk management have generally experienced stable or modestly reduced premiums, increased flexibility on retentions, and strong insurer participation across both primary and excess layers. Clients in higher-hazard industries, or those with adverse claims histories or complex operational profiles, have faced more selective underwriting and, in some cases, flat pricing or modest increases. The report noted that even for these clients, the volume of available capacity has helped prevent material adverse outcomes.
The cyber insurance market has sustained a period of relative stability, with competitive pricing, broader coverage options, and increased capacity available to buyers. EBM attributed this in part to improving cyber risk practices among organisations and greater insurer confidence in assessing cyber exposures. However, the report drew attention to a widening gap between insurance market conditions and the actual cost of cyber incidents.
Citing data from the Australian Signals Directorate (ASD), EBM noted that self-reported cyber crime costs for medium-sized businesses rose 55% year on year, with average incident costs reaching close to $100,000. Small businesses reported a 14% increase, with average impacts exceeding $50,000. The report described this as a disconnect between favourable insurance conditions and growing real-world exposure and noted that sustained claims severity is prompting continued underwriting discipline among insurers, even as pricing remains competitive.
EBM’s report projected that soft buying conditions will extend into the second half of 2026 (H2 2026) for most industries and risk classes, with clients likely to continue benefiting from greater insurer appetite, deeper capacity, stable or declining premiums, and more flexible underwriting. The pace of softening, however, is expected to moderate. The report identified ongoing geopolitical tensions, energy price volatility, climate-related losses, and broader economic pressures – including inflation and slowing growth – as factors that continue to shape insurer sentiment and could accelerate a market turn if conditions worsen. Agriculture and clients with recent or material loss experience are expected to remain among the more challenging sectors. EBM concluded that no major market shift is expected in the near term, and that conditions should remain broadly stable for most clients, provided no significant global or loss-driven shock materialises.
