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Australian Insurers Face Challenges in Risk Preparedness

Cybersecurity and AI: Emerging Risks for the Insurance Sector

Australian Insurers Face Challenges in Risk Preparedness?w=400

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Recent findings from the PwC Insurance Banana Skins Survey reveal that Australian insurers are trailing behind their global counterparts in risk preparedness.
The survey, which gathered insights from 698 insurance executives across 42 territories, indicates that Australian insurers scored 6.6% lower on the Preparedness Index compared to the global average.

Cybersecurity threats continue to be the foremost concern for the industry. Notably, artificial intelligence (AI) has rapidly ascended as a significant risk, moving from 11th to third place in just two years. Antonie Jagga, leader of PwC’s insurance operations in Australia, highlighted the swift evolution of these risks, stating that the acceleration of cyber, technology, and AI-related risks is unprecedented in the insurance sector.

To bridge this preparedness gap, Australian insurers are encouraged to invest in workforce development, particularly in areas undergoing transformation due to AI, such as underwriting and claims management. Modernising technological infrastructure is also crucial for mitigating these emerging risks and maintaining a competitive edge.

Additionally, political risks have risen to fourth place among identified concerns, reflecting increased governmental scrutiny over premium hikes and coverage limitations in regions prone to natural disasters. This underscores the need for insurers to balance risk management with affordability and accessibility for consumers.

In summary, the Australian insurance industry must proactively address these emerging risks by enhancing preparedness strategies, investing in technology and talent, and fostering transparent communication with stakeholders to navigate the evolving risk landscape effectively.

Published:Friday, 23rd Jan 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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Knowledgebase
Depreciation:
The reduction in the value of an asset over time, used in insurance to calculate the actual cash value of property.

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