Median salary increases in 2026 were slightly higher in the Australian insurance industry than the wider financial services sector, research from Aon finds, but employee turnover was also higher.

Aon’s 2026 Salary Increase and Turnover Study shows that median salary increases in insurance were 3.5% in 2026 and are projected to remain at this level in 2027.

Broader financial services average salary increases were 3.1% this year but will join insurance on 3.5% in 2027, Aon finds. 

Across a range of sectors, the average increase was 3.5%, the same as for insurance, and this will edge up to 3.6% next year.

Insurance organisations reported median staff voluntary turnover of 18.8%, however, compared with 15.6% across financial services and considerably higher than 10.6% across all Australian industries.

Aon says that most organisations are currently operating in a relatively cautious environment, and actual outcomes may vary depending on individual business performance and affordability. 

“The key workforce story for 2027 is not the size of salary budgets, but how organisations are allocating them”, the firm adds.

Associate partner, talent data solutions business leader, Pacific, Yvette O'Reilly, says: “Salary budgets remain relatively stable, but employers are becoming more deliberate about where they invest reward dollars.

“The organisations achieving the greatest impact are not necessarily those spending more, but those making more informed decisions about where reward investment is directed.

"We are seeing employers become increasingly targeted in how they allocate salary increases, prioritising critical roles, scarce skills and talent segments that are most important to future business performance.”