Over the 12 months to 30 June 2025, Australia saw a 25% decrease in total insurance losses from natural catastrophe events, falling from $2.61 billion in 2023–24 to $1.97 billion in 2024–25, according to the Insurance Council of Australia (ICA).
Data from the ICA’s latest report shows a notable reduction in total claims incurred year-on-year, though the number of claims was much closer, falling by only 7% from 163,400 claims related to declared extreme weather events to 154,100 in 2024–25.
Declared events over the 12 months included one cyclone and two floods, compared with one cyclone and three storm events the previous year. The three events were the North Queensland Floods ($289 million), Ex-Tropical Cyclone Alfred ($1.43 billion), and the Mid North Coast and Hunter floods ($248 million).
Australia has consistently ranked second globally for extreme weather losses over the past 45 years, behind only the US for economic and insured losses per capita. In the last five years, it was only pushed into third place by two extraordinary events in New Zealand.
Australia’s high ranking reflects its unique geography and exposure to natural perils, compounded by population growth in higher-risk areas and infrastructure not designed to withstand the impacts of a changing climate.
Following the Federal Government’s Climate Risk Assessment, the report emphasised policy recommendations to help Australia adapt to its physical climate risks. Key measures include defending critical infrastructure, improving land use planning, and enhancing building resilience, mainly through the establishment of a $30 billion Flood Defence Fund to protect the most vulnerable communities.
Andrew Hall, CEO of ICA, said, “While Australia has always faced extreme weather, the accelerating losses per person and their compounding impact on communities is costly and ongoing.
“Australia is in a global race to ensure its built environment has the resilience needed to protect assets – this data clearly shows that each decade is costlier than the last, with insufficient investment in resilience leaving Australians to shoulder an outsized economic burden.
“Insurers have been costing the implications of extreme weather for a long time now – but with escalating costs and pressure to build more homes faster we need to speed up our investment in the interventions required to mitigate the impact of these events.
“With the cost of restoring or rebuilding increasing every year, all levels of government will continue picking up an ever-growing bill that could have been prevented through strategic resilience investment now.”
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