Australia’s property insurers face another year of elevated claims costs in 2026 as repair capacity tightens and more losses move into complex strata environments, according to a discussion paper by Crawford.
The paper said supply chains have largely stabilised since the peak of disruption, but the “cost base” underneath repairs remains sticky, with labour, preliminaries, and the cost of time increasingly driving severity and duration.
Crawford pointed to macro pressures, including inflation and interest rates, noting that housing was the largest contributor to Australia’s consumer price rises in the 12 months to December 2025, while the Reserve Bank of Australia lifted the cash rate to 3.85% in February 2026.
Labour shortages were a key constraint in its February 2026 Managed Repair Panel Survey, with 50% of respondents reporting tiler shortages and 47.4% reporting bricklayer shortages — trades that often sit on the critical path and can push out completion dates. Roofers also stood out, with nearly a third of respondents reporting cost increases of 16%–20% or more.
Materials were described as stabilising overall, but a handful of “repeat offender” categories — flooring, kitchen supplies, and glazing — continue to carry a long tail of delays that can disrupt the final stretch of repairs.
Capacity pressure could intensify in southeast Queensland as the construction pipeline builds, with the paper quoting a Queensland Government report saying: “In southeast Queensland, the Brisbane 2032 Olympics pipeline is likely to act as a capacity amplifier, tightening competition for repair-critical trades as major venue and transport works ramp up.”
It added that insurers may need to manage claims inflation less as a single number than as widening variance between average and difficult claims, with cycle time, quote dispersion, and regional capacity signals rising in importance.
The paper’s emphasis on the growing complexity of property claims comes as placement rules for large residential strata risks are also being adjusted. The Australian Securities and Investments Commission has introduced disclosure relief for joint placements, under which only the lead insurer must prepare the Product Disclosure Statement, while a supplementary PDS will list supporting insurers and their shares.
On the broader market trajectory, GlobalData projects Australian property insurers will deliver average annual premium growth of 7.5% through 2030, with direct written premiums rising from A$27.4bn (approx. US$19.03bn) in 2026 to A$36.6bn, citing climate exposure and claims inflation as key factors in rate adequacy.
