Climate disasters are now costing insurers around AUD 4.5 billion (USD 2.9 billion) each year, a figure three times higher than it was thirty years ago, according to a report released on Tuesday by the Insurance Council of Australia (ICA).
This rise reflects the increase in extreme weather events, the growing population in flood-prone areas, and the ongoing vulnerability of infrastructure to climate change, the Council explained.
Since the beginning of the decade, insurers have been paying out an average of AUD 4.5 billion in claims annually. In 2025 alone, three major disasters—floods in northern Queensland, former cyclone Alfred, and flooding in New South Wales—led to nearly AUD 2 billion in losses.
The report, based on data from reinsurer Munich Re, highlights that, even when adjusted for inflation, losses from natural disasters have tripled since the 1990s. Australia is among the most exposed countries in the world, following the United States, but ahead of France, Germany, and Canada.
The study also underscores social fragility in the face of flooding: of the 242,000 most at-risk homes, 186,000 are uninsured, often occupied by households with below-average incomes. “The most vulnerable are often the least protected when a disaster strikes,” the ICA warned.