Yes you will have to pay duty, as it is a new item that was purchased overseas.
If you were at home, lost it and bought a new replacement, you will have paid Australian duty on that item, as the importer paid duty when it originally came from the factory (and of course included the cost of that duty in the selling price you paid).
In this case, if you buy it overseas Australia still wants its import duty. They don't really care why you bought it again, only that duty is paid on products imported into the country.
Your real question at this point (and one likely only the insurance agency can answer) is will your travel insurance provider pay both the replacement amount AND the subsequent duty you have to pay upon returning home, since they are both part of the "replacing the item" cost