Insurance Explained

Understanding insurance prices, risks and affordability

Explore how insurance prices in Australia are changing, what drives those changes and what they mean for households and society. Insights grounded in data and research.

Explore insurance trends Why premiums change

Latest reading

Insurance prices rose 5.4% in the year to September 2026. Overall consumer prices rose 4.3%.

Source: ABS Consumer Price Index, monthly, original series. “Insurance” is the CPI insurance expenditure class, not the wider insurance and financial services group.

Insurance prices, annual change

+5.4%

Year to September 2026

ABS monthly CPI, insurance expenditure class. Retrieved 3 November 2026.

All-groups CPI, annual change

+4.3%

Year to September 2026

ABS monthly CPI, all groups. Retrieved 3 November 2026.

Insurance prices over five years

+47.0%

All-groups CPI rose 24.6% over the same period

September quarter 2021 to September quarter 2026. Calculated from ABS quarterly index numbers.

Home insurance affordability stress

15%

of households (1.61 million), year to March 2024

Premium above four weeks of gross household income. Actuaries Institute.

Insurance trends

Insurance prices and overall consumer prices

Price change for comparable insurance policies, set against the all-groups Consumer Price Index.

Over the five years to the September quarter 2026, insurance prices rose 47.0%. Overall consumer prices rose 24.6%.

import {prepare, trendChart} from "./js/charts.js"

raw = FileAttachment("data/abs_cpi.csv").csv({typed: true})
homeSeries = ["Insurance", "All groups CPI"]

viewof measure = Inputs.radio(new Map([["Annual change", "annual"], ["Cumulative change", "cumulative"]]), {value: "annual"})

viewof years = Inputs.radio(new Map([["5 years", 5], ["10 years", 10], ["20 years", 20], ["Since 1989", 99]]), {value: 10})

Insurance All-groups CPI

homeData = {
  const latest = d3.max(raw, d => d.date);
  const start = new Date(latest);
  start.setUTCFullYear(start.getUTCFullYear() - years);
  return prepare(raw, {measure, start, series: homeSeries});
}

trendChart(Plot, d3, homeData, {measure, freq: "quarterly", width, series: homeSeries})

What this shows

How prices for comparable insurance policies, such as home, contents, motor vehicle and compulsory third party insurance, have changed. The ABS prices the same kinds of policy over time, so the index tracks price change rather than spending.

What it does not show

What households pay in total, which also moves with sums insured, coverage choices and risk. It also does not show why prices changed. Why premiums change sets out the drivers and the evidence reported by regulators and industry bodies.

Source: ABS, Consumer Price Index, Australia (Data API, dataflow CPI). Quarterly, original series, Australia. Annual and cumulative changes calculated from index numbers. Retrieved 3 November 2026. Download data (CSV)

Why premiums change

Why are insurance premiums increasing?

Actuaries start from the expected cost of claims and add the costs of running the business and holding capital. The market price can then move away from this technical price.

Expected claims How often claims occur and what they cost + Expenses Operating costs and commissions + Risk and capital loading Reinsurance and a margin for profit or return on capital = Technical premium The actuarially calculated price

Insurers then adjust the technical premium for competitive positioning or to manage their exposure, and apply discounts, surcharges, taxes and levies to reach the price a customer pays.

Claims costs

Repair and rebuilding costs, labour, materials, vehicle parts and replacement values.

Natural disasters and climate risk

Floods, bushfires, cyclones and storms, and how insurers assess hazard, exposure and vulnerability at each location.

Reinsurance

Insurers pass part of their catastrophe risk to reinsurers. The cost of reinsurance is part of the premium.

Operating and capital costs

Administration, marketing, claims handling, commissions and the return required on the capital insurers must hold.

Competition and pricing strategy

Market conditions, customer behaviour and pricing practices such as price optimisation.

Data and risk modelling

AI and more detailed data allow more individualised pricing, which can raise premiums for properties with higher risk levels.

Explainers

Common questions

Short, sourced answers to common questions about insurance prices.

Pricing

Why are insurance premiums increasing in Australia?

What the price data show, and the cost pressures reported by regulators and industry bodies.

Inflation

How does insurance contribute to inflation?

How the ABS measures insurance prices, insurance’s weight in the CPI, and how much it adds to inflation.

Disasters and climate

How do natural disasters affect insurance premiums?

How insurers price natural hazard risk, what recent disasters cost, and what the cyclone reinsurance pool showed.

Affordability

Why are some households underinsured or uninsured?

Affordability stress, underinsurance and non-insurance, and what the latest estimates show.

Commentary

Selected articles

360info · 2024

Why your insurance premiums keep going up

The key drivers of rising insurance premiums and how consumers can respond.

The Conversation · 2026

Insurers have a lot of data about us. Where do they get it, and how do they use it?

Australian Financial Review · 2026

AI doesn’t need your race to discriminate against you

More commentary and media

About

Insurance Explained is a public information initiative developed by Associate Professor Fei Huang at UNSW Sydney. It aims to improve public understanding of insurance pricing, risks and affordability through accessible data, published evidence and clear explanations.

About the project · Fei Huang · AI4Insurance Lab