New data from the Insurance Council of Australia shows the country has held an unwelcome second place for extreme weather losses for most of the past 45 years, sitting just behind the United States.
The numbers combine insured and broader economic losses, averaged across six developed countries, to show how sharply climate-linked damage has risen.
The figures, drawn from Munich Re’s NatCatSERVICE and published in the ICA’s 2024-25 Insurance Catastrophe Resilience Report, show Australia typically ranks No. 2 for per-capita economic and insured losses, only slipping to third in the last five years thanks to two extraordinary events in New Zealand.
The costs of extreme weather events such as floods, bushfires and storms have nearly tripled in Australia since the 1990s, insurers have warned, with poorer communities disproportionately burdened.
The climate crisis, ageing infrastructure and growing populations in increasingly affected regions have left the country more vulnerable.
In the 2020s, extreme weather has been responsible for $4.5bn in claims annually on average, the ICA report said. The three events declared as insurance catastrophes in 2025 alone generated nearly $2bn in claims, most of which related to housing.
Each decade since 1980, inflation-adjusted losses from floods, bushfires, storms and even deep cold have climbed across Australia, New Zealand, the US, France, Canada and Germany.
Australia’s long-standing position reflects its geography, heavy exposure to natural perils and strong population growth in risk-prone regions.
Add infrastructure that wasn’t built for a shifting climate, and the trend becomes pretty clear, according to our analysts.
The Report also details insured losses from the past year: almost $2 bn across three major events. The North Queensland Floods reached $289 mn, Ex-Tropical Cyclone Alfred surged to $1.43 bn, and the Mid North Coast and Hunter floods added $248 mn. A familiar pattern, just compressed into twelve months.
The ICA highlighted federal policy recommendations following the national Climate Risk Assessment. Top priorities include protecting critical infrastructure, tightening land-use planning and lifting building resilience.
The flagship proposal is a $30 bn Flood Defence Fund aimed at safeguarding the communities facing the highest exposure.
ICA CEO Andrew Hall said the accelerating per-person losses and social fallout keep stacking up. He argued Australia is in a race to reinforce its built environment, and every decade grows more expensive than the last. Under-investment in resilience leaves households and governments with an outsized financial load.
Insurers have priced the impact of extreme weather for years, but rising costs and the push to accelerate homebuilding demand faster investment in mitigation.
Andrew Hall, ICA CEO
As rebuilding costs climb, governments will face escalating bills that could have been avoided with strategic resilience spending now rather than later.
