At $4.5bn each year, extreme weather is costing Australia three times as much compared with 1990s, insurers say | Insurance (Australia)

The costs of extreme meteorological events such as floods, bush fires and storms have almost tripled in Australia since the 1990s, have warned insurers, with poorer communities overwhelmed in a disproportionate manner.

The climate crisis, aging infrastructure and growing populations in increasingly affected regions have left the country more vulnerable, according to a report published Tuesday by the Australia Insurance Council.

In the 2020s, extreme weather conditions were responsible for $ 4.5 billion in complaints per year, according to the ICA report. The three events declared as insurance disasters in 2025 generated nearly $ 2 billion in complaints, most of which were linked to housing.

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Former tropical cyclone Alfred cost households and businesses over $ 1.4 billion in complaints, while floods in northern Queensland in January and in the region of the middle of the north of NSW and Hunter in May, were the remaining $ 540 million.

Smaller events not declared disasters have generated millions more in insurance complaints.

“While Australia has always faced extreme weather conditions, the losses accelerated by person and their aggravating impact on the communities are expensive and in progress,” said Council Director Andrew Hall.

“Each decade is more expensive than the previous one.”

The report has revealed that the economic losses of extreme weather events have almost tripled in the past three decades, even after deleting inflation, citing the analysis of the Munich Re Multinational Insurance Society.

Australia has experienced higher economic costs based on extreme weather conditions on average per person than France, Germany and Canada, the analysis revealed. He had historically faced higher costs than New Zealand until the 2020s, after damage caused by the recession and sustainable in this country in 2023.

According to Seth Westra, a climate risk teacher at the University of Adelaide

“You have fire damage, flood damage, coastal floods, tropical cyclones: each of them should have more serious impacts due to climate change,” said Westra.

“There is absolutely no sign of this judgment … The trajectory is only in terms of guaranteed costs.”

Australia was faced with billions more uninsured losses, with a little less than half of Australia’s annual losses against extreme weather conditions not covered by insurance, according to the report.

On average, a third of extreme weather losses were not provided in the United States, New Zealand and Canada in the 2020s.

Houses in flooding areas and fire subjects have been subject to an increase in insurance costs as climate -oriented disasters become more frequent and more intense.

ICA estimates that 186,000 of the 242,000 Australian houses most likely to cope with floods have no flooding, for example. The vast majority of these – 70% – are in regions with average income below the national median.

“There is a clear correlation between the high risk of floods and the socio -economic disadvantage, the most vulnerable in our country, the least likely to have an insurance network when the disaster strikes,” said the report.

The increase in the number of houses should become non -insurable as global heating continues, with the assessment of climate risks of the Albanian government, warning up to 185,000 properties of Queensland would risk “very high risk” of natural disaster if global heating continued tirelessly.

This report also warned annual costs in the economy of extreme weather conditions could reach $ 40 billion per year in 2050, even if global temperatures only increased 1.5 ° C.

The abolition of uninsured damage would require governments to be determined who pays for recovery, Westra said.

“”[Governments] need to think about what is happening if, all of a sudden, large parts of [country] I can no longer afford insurance.

The Insurance Council has called on governments to finance support measures and scrap insurance withdrawals that inflate premium costs – already stimulated for people at risk of higher flood.

The treasurer of New South Wales, Daniel Mookhey, described insurance samples as a “candidate for the worst state tax” and reprimanded the reform of the state emergency services after the Albanian government’s round economic reform table.

“These are very ineffective taxes, and that is why, for example, we are looking forward to [discussing] The future of the debit of emergency services, ”Mookhey told a hearing of parliamentary estimates in August.