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.

Short answer

Insurance makes up 1.36% of the Consumer Price Index basket. In the year to September 2026, insurance prices rose 5.4% and added 0.07 percentage points to the 4.3% rise in the CPI.

How the CPI measures insurance

The CPI combines two pieces of information for each item: how much its price changed, and its weight in household spending.

Price. The insurance expenditure class covers comprehensive insurance for dwellings, home contents and motor vehicles, and compulsory third party motor vehicle insurance. Health insurance is classified in the Health group. The ABS measures price change using gross premiums, collected each month from web-scraped price quotes for a range of customer profiles. The index measures price change, not what households spend in total, and the ABS does not publish separate indexes for home and car insurance (ABS 2025).

Weight. The CPI weights insurance by the cost of the service provided by insurers, which the ABS measures as gross premiums less claims, rather than by the gross premiums households pay. The ABS updates the weights once a year, using National Accounts data, and holds them fixed between updates (ABS 2025).

How much insurance adds to inflation

At the December quarter 2024 reweighting, insurance accounted for 1.36% of the all-groups CPI. In the year to September 2026, it contributed 0.07 percentage points of the 4.3% annual rise. The ABS calculates and publishes this contribution figure (ABS 2026a).

Insurance, and insurance and financial services

The ABS publishes two related series.

CPI weights at the December quarter 2024 reweighting. Source: ABS.
Series	What it covers	Weight in CPI	Contribution, year to September 2026
Insurance	Home, contents, motor vehicle and compulsory third party insurance	1.36%	0.07 points
Insurance and financial services	Insurance plus deposit and loan fees and other financial services	5.58%	0.21 points

The Selected Living Cost Indexes

The ABS’s Selected Living Cost Indexes weight insurance by the gross premiums households pay, rather than the net value used in the CPI (ABS 2026b).

Taxes on premiums

When the GST was introduced in 2000, the CPI insurance index rose about 30% in a year, much more than the premiums households paid. Taxes are charged on gross premiums but were measured against the smaller net base used in the CPI (ABS 2000).

Last reviewed 4 November 2026.

Sources

ABS. 2000. Treatment of Insurance Services in the Australian Consumer Price Index. https://www.abs.gov.au/AUSSTATS/abs@.nsf/94713ad445ff1425ca25682000192af2/e680f651d1d3a1eeca256f2a000f7750!OpenDocument.

ABS. 2025. Consumer Price Index: Concepts, Sources and Methods, 2025. https://www.abs.gov.au/statistics/detailed-methodology-information/concepts-sources-methods/consumer-price-index-concepts-sources-and-methods/2025/price-collection.

ABS. 2026a. Consumer Price Index, Australia, and CPI weights. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia.

ABS. 2026b. Selected Living Cost Indexes, Australia methodology, June 2026. https://www.abs.gov.au/methodologies/selected-living-cost-indexes-australia-methodology/jun-2026.