Insurance Banana Skins – an Australian perspective

The Insurance Banana Skins report, informed by a global survey, highlights the most pressing risks  -  “Banana Skins”  - facing the insurance industry. This year’s findings reveal a sector grappling with unprecedented market fragility and complexity, both in Australia and worldwide. The risk landscape is more intricate and interconnected than ever, with digital disruption and geopolitical uncertainty reshaping priorities. 

Cyber crime remains the foremost risk for Australia, mirroring trends across Asia Pacific and globally. This universal vulnerability to digital threats underscores the urgent need for robust cyber resilience. Notably, Technology and Artificial Intelligence (AI) have surged up the Australian risk agenda, reflecting the sector’s rapid digital transformation and the challenges of managing innovation at scale. Meanwhile, Political risk has climbed sharply, signalling heightened sensitivity to regulatory and geopolitical shifts. In contrast, concerns about Climate change and Regulation have dropped down in the Australian rankings, even as they remain prominent elsewhere - a recalibration that speaks to the industry’s evolving priorities.

The Banana Skins Index measures the industry’s perception of risks. In 2025, the level of concern in Australia and globally has eased since 2023, with a sharper decline in the Australian result. This could suggest a degree of adaptation or risk fatigue within the local market. 

While some risk perceptions have eased, the Preparedness Index indicates that Australian insurers’ readiness to manage these risks has slipped since 2023 and remains lower than the global average. This growing gap underscores a significant leadership challenge and points to the need for renewed focus on building resilience and preparedness as industry risks evolve.

As Australia’s insurance industry faces growing challenges from cyber threats, technological change, and the disruptive power of AI, the sector must adapt and strengthen its resilience. At the same time, it cannot lose sight of its core mission: providing affordable and appropriate cover for customers. Achieving this balance - responding to rapid innovation while protecting the needs of policyholders - will be vital to the continued relevance and success of insurers in the years ahead. 

Key questions for leaders:

• Are we moving fast enough to keep pace with emerging risks? 
• How can we close the preparedness gap and build true resilience? 
• What new approaches are needed to ensure insurance remains accessible and affordable for all Australians? 

The answers to these questions will define the sector’s future - shaping not just risk management strategies, but the very trust and value that insurers deliver to society. 

This report has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this report without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this report, and, to the extent permitted by law, PricewaterhouseCoopers , its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it.

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