The top 10 (plus 10)
We run down the key industry-shaping issues (and associated voices) of 2025
By Wendy Pugh
The industry has navigated a diverse set of challenges this year, across enduring, recurring and emerging themes. So, in this season of reflection (and listicles), Insurance News has charted some of 2025’s top influences and influencers.
The changing climate and its natural disaster impacts remain a focus – albeit amid a relatively quiet year for catastrophes – while risk exposures and cost-of-living pressures have upped the ante on insurance affordability questions, with implications for the industry’s social licence.
Revising codes of practice is a work in progress for insurers and brokers, strata complexities are putting the spotlight on commissions, artificial intelligence and its potential are increasingly hot topics, while politics has generated some left-field contributions.
Amid all this, high-profile and some lesser-known industry identities have taken a lead in different ways.
1. Climate threats
“No Australian community will be immune from climate risks that will be cascading, compounding and concurrent,” the federal government’s first National Climate Risk Assessment says.
The report paints a stark picture of impacts from more frequent and severe floods, fires and cyclones, plus consequences from rising sea levels.
An adaptation plan released with the document underscores the challenges.
IAG and the US National Centre for Atmospheric Research also provided an assessment, while the Insurance Council of Australia released data showing accelerating losses per person from extreme weather across successive decades.
ICA president and Suncorp chief executive Steve Johnston says the past five years have been challenging for the industry, but while some issues come and go “the one constant is the trajectory of our climate and its impact on our substandard built environment”.
In November, Mr Johnston hosted a roundtable on preventing new home construction that puts more people at risk. Claims after Tropical Cyclone Alfred and NSW storms highlighted natural peril exposures.
“We must collectively focus on enhancing our response to extreme weather events and, crucially, advocate for greater investment in preventative measures,” Mr Johnston said after visiting flood-hit Port Macquarie.
2. Affordability
Natural disaster threats, risk-based pricing and past planning decisions mean more people are finding insurance is no longer affordable.
The Australian Prudential Regulation Authority has the issue on its radar when looking at climate vulnerability, while Australia Institute research has found nearly one in five homes are underinsured or uninsured as premiums increase.
Government and industry are increasingly accepting that both have roles to play in preventing widening protection gaps, particularly with society’s most vulnerable worst affected and as housing supply pressures increase. ICA is calling for a $30.15 billion flood defence fund.
Daniel Mulino was promoted to Assistant Treasurer and Financial Services Minister after the Albanese government was re-elected in May, bringing extensive experience around insurance and flood cover.
Dr Mulino chaired the parliamentary inquiry into the 2022 floods that inundated parts of eastern Australia, including his Maribyrnong electorate in Melbourne.
The inquiry made 86 recommendations, with the government by mid-November yet to formally respond. In September, Dr Mulino joined insurers on a trip to Europe, where overseas affordability and availability issues were discussed. A “full menu of options” should be considered, he told the ICA conference.
3. Codes of practice
The general insurance, broking and life codes are undergoing reviews, with overhauled documents due to be released next year.
The Insurance Council of Australia plans a major rewrite after an independent review delivered 101 recommendations last December, with consumer groups closely watching.
Public consultation is expected in the first half of 2026 and regulatory approval will be sought, in a first for the document.
The National Insurance Brokers Association will consider feedback from independent reviewer Phil Khoury, who released a consultation paper encompassing issues such as disclosure and managing conflicts of interest, which have proved controversial in the past.
NIBA president Nick Cook pointed to the code review and amplifying the organisation’s voice as among priorities, as he accepted the top role this year at a critical juncture.
Mr Cook told delegates at the peak body’s Gold Coast convention that “not everyone is going to get what they want” from the new code, NIBA won’t “stand still” and the board is focused on “ensuring the code is fit for purpose now and into the future”.
Mr Cook – Steadfast’s executive general manager of Australasian networks, broker and insurer services – has more than three decades’ experience in the insurance and financial services sector.
4. Strata
The New South Wales government has introduced four tranches of legislative reforms, including on remuneration transparency, and it is not finished with its review program.
It has asked the state productivity commission to examine market impacts from banning strata managers from accepting commissions or other conflicted payments.
Strata Community Association NSW has proposed members phase out commissions from the start of next year, but state reforms could go further.
The proportion of people living in higher-density developments is anticipated to rise, other states are watching the NSW reforms, and maintenance and building quality issues are also on the agenda.
NSW Fair Trading commissioner Natasha Mann oversees an agency at the forefront of strata reforms, and which is set to wield stronger powers.
Its role may further increase as debate continues on commissions. Fair Trading has established a strata and property services taskforce, and compliance and enforcement priorities include strata manager disclosures of conflicted remuneration, gifts and training.
Ms Mann has consulted with brokers and other industry participants amid debate on the reforms, and in a Strata Community Association NSW convention address she praised the group for planning to transition from accepting insurance commissions.
5. Artificial intelligence
AI is front and centre in technology discussions as companies grapple with the opportunities and pitfalls.
Generative AI has the potential to transform the industry by improving efficiency and effectiveness, an Underwriting Agencies Council webinar heard, while KPMG has suggested insurers “pick up the pace” on adoption as projects take too long.
An ICA report with the CSIRO urges a “consumer-centric, values-led approach” to ensure benefits are delivered fairly, safely and transparently.
Regulators are watching developments, and are exploring benefits for their own oversight activities as AI capabilities evolve.
Insurtech Australia chief Simone Dossetor is a leading voice encouraging the industry to widen its vision in exploring innovative solutions and expanding customer reach.
“We exist as Insurtech Australia to bring the future of global insurance right here,” she told an industry conference.
“We really want to be able to work out, how can we work better between insurtech and insurers, how can we improve that customer experience and outcomes, and how can we really take advantage of the acceleration of technology that AI is bringing?”
The group wants to see more long-term research and development funding to assist start-ups and drive innovation.
6. Mergers and acquisitions
Allianz wrapped up its acquisition of SA motoring club RAA’s underwriting business and RACQ Insurance become part of IAG, which also announced plans – since rejected by the competition watchdog – to buy RAC operations in WA.
Private equity turned its sights on the sector, with Swedish firm EQT partnering with CVC Asia-Pacific on a bid for AUB Group that ultimately fell through, while building services company Johns Lyng Group agreed to an offer worth more than $1 billion from Pacific Equity Partners.
Broking groups continue to acquire and consolidate as they bolster portfolios and strengthen positions, while the competition regulator is enthusiastic about a new approvals regime that begins in January.
IAG chief executive Nick Hawkins has pursued the RACQ and RAC underwriting businesses and long-term distribution arrangements as the company puts growth through acquisitions back on its agenda.
The deals add to its NRMA Insurance brand and a Victorian joint venture.
Mr Hawkins says IAG has “a proud history with motoring clubs” and a tech modernisation program means it is well placed to integrate new businesses.
The competition regulator waved through the Queensland deal, but after publishing a statement of issues on WA impacts it rejected the RAC tie-up on December 11.
7. Attracting talent
It’s still a struggle to bring the younger generation into the industry, as recognised in a six-year talent roadmap drawn up to address a skills shortage that is expected to worsen.
Almost 30% of the insurance workforce is due to reach or exceed retirement age by 2030, a much higher proportion than in the wider economy.
ICA launched a three-month advertising campaign this year promoting the sector’s rewarding career paths, while NIBA and the Australian and New Zealand Institute of Insurance and Finance teamed up for a careers expo aimed at undergraduates and graduates. Recruiting a more diverse workforce remains a focus.
NIBA’s 2024 young broker of the year award raised the profile of Emily-Rose Srbinovska, taking her on a journey of speaking engagements and networking.
She enjoys mentoring, is often contacted for advice via Instagram, TikTok and LinkedIn, and says the profession can answer the desire many have for a career with social purpose.
Mrs Srbinovska says she has been trying “to create a voice that younger people will listen to”.
8. Regulatory over-reach
Insurers and brokers swamped by new and old regulatory requirements have raised their voices.
The Insurance Council of Australia says compliance is costing as much as $3.5 billion a year, and duplication and complexity is not helping consumers.
Regulators have acknowledged the need to avoid overlaps in areas such as data collection and to find ways to cut unnecessary red tape.
Australian Securities and Investments Commission chair Joe Longo told a forum the nation is “pretty good at creating legislation and creating complexity” but it still needs to “get better and more efficient at law reform”.
ICA chief executive Andrew Hall says a strong regulatory framework protects consumers and keeps the sector safe, but it is important that costs, which are ultimately borne by policyholders, are “proportionate to the problems we’re attempting to solve”.
An ICA report says more than 30,000 obligations are enforced by 25 federal, state and territory authorities under 300 different regulatory instruments.
Steps for improvement could include consolidating duplicative provisions, aligning definitions and enhancing co-ordination across agencies, the Insurance Council says.
9. Government steps in
The federal government moved further into the lenders’ mortgage insurance market as it kept an election pledge to guarantee low-deposit loans for all first home buyers.
The scheme has expanded since its January 2020 debut, raising concerns about the viability of the private LMI market.
In Tasmania, the Liberals returned to power after pledging to create a government insurer called TasInsure to deliver affordable premiums.
Decades ago, governments sold off insurance arms and other state assets as they replenished coffers, saying the operations belonged in private hands.
A preliminary TasInsure draft bill has been released amid scepticism about the proposal.
Tasmanian Premier Jeremy Rockliff, who went to the polls in July after a parliamentary no-confidence vote, said the cost of insurance was a common topic as he travelled Tasmania, and he pledged action in the form of TasInsure.
Post-election, he’s back at the helm and his minority Liberal government is moving ahead with the plan.
Mr Rockliff suggests jurisdictions on the mainland may follow suit.
“I look forward to the policy positions of other states and territories … that replicate TasInsure, whether that be VicInsure or WAInsure, Queensland Insure,” he said. “We’re not followers in Tasmania, we’re leaders.”
10. Mental health
The Actuaries Institute says the rising burden of mental illness is straining a fragmented financial safety net that includes private life insurance and state-based workers’ compensation.
Worker injury schemes battling fiscal pressure and the need to raise premiums have highlighted the higher cost of psychological injuries, and in NSW controversial changes failed to pass parliament.
Public liability underwriters have seen rising claims for psychological injury in addition to physical issues, and an Insurance Council of Australia report notes the increasing number and cost of nervous shock claims made by family members of injured people.
Council of Australian Life Insurers chief Christine Cupitt has put mental health high on the agenda as claims pressures increase.
The peak body was one of many signatories to an Australians for Mental Health open letter that was released before a three-day federal government economic roundtable.
Ms Cupitt says addressing the mental health crisis “could be the single biggest productivity reform Australia can make this decade”.
The group will draft an assessment framework for mental health claims following consultation early next year with consumer advocates, medical specialists and other stakeholders.
