Australians remain cautiously optimistic about the nation's future, despite nearly two-thirds experiencing a significant disruption in the past year as cost-of-living pressures, climate volatility and economic uncertainty intensify, according to new research by country's largest general insurer IAG.
The 28-page inaugural “IAG Resilient Futures Report - Understanding how Australians experience and respond to risk” which includes the IAG Risk Index, tracks Australians’ confidence, outlook and exposure to disruption. The IAG Risk Index is a new, national benchmark.
The research draws on insights from more than 2,400 consumers and small businesses across metropolitan, regional and rural communities. It reveals that 58% of consumers and 72% of SMEs surveyed expressed confidence about the future.
The cost-of-living pressure has emerged as the single biggest concern, influencing day-to-day spending, financial security and preparedness. It also highlights clear differences in how risk is being felt across generations.
The media release issued by IAG on 18 June 2026 said, “Climate-related disruption is also emerging as a prominent business risk. Nearly half of small businesses (48%) report being impacted by extreme weather in the last 12 months and gaps persist in key areas, including business continuity planning, maintaining backup suppliers, and regularly reviewing insurance coverage.”
The study found that younger Australians, particularly GenZ and Millennials, are more hopeful than other generations but are more financially exposed, often relying on debt (45.5% of Millennials), delaying healthcare appointments (47.7% of Millennials) or taking on extra paid work or side hustles (60.5% of GenZ) to manage rising costs.
Older Australians, especially Baby Boomers, express lower levels of optimism (46.1% vs. 56.7% nationally), but are more likely to have financial buffers and take protective steps, underscoring a growing gap in resilience.
IAG Managing Director and CEO Nick Hawkins said that while Australians remain optimistic, broader macroeconomic headwinds, particularly those stemming from the conflict in the Middle East, are placing additional strain on already stretched household budgets.
The data suggests these global dynamics are now shaping Australians’ behaviour; constraining spending, delaying investment and eroding savings. This is particularly acute among younger people and smaller businesses with less capacity to absorb sustained pressure.
Mr Hawkins said, “Australia’s future prosperity depends on how well we anticipate and recover from disruption. The Resilient Futures Report and IAG Risk Index give us a picture of how Australians are feeling about risk and where protection gaps remain, so we can act earlier and more effectively.”
The research reveals that risk is no longer a distant or occasional concern for Australians, with 67% of consumers and 64% of SMEs experiencing a significant disruption in the past year.