Australia booked $1.97bn in insured losses from natural catastrophes in the 12 months to 30 June 2025, according to new Insurance Council of Australia (ICA) data. That’s a 25% drop from the $2.61bn recorded in the previous financial year.
The volume of claims didn’t fall nearly as far. Insurers processed 154,100 claims tied to declared disasters, only 7% fewer than the 163,400 lodged in 2023–2024.
Three major events drove the latest numbers: Ex-Tropical Cyclone Alfred at $1.43bn, the North Queensland Floods at $289mn, and the Mid North Coast and Hunter floods at $248mn.
The year before, the country saw one cyclone and three storm events; this time, one cyclone and two flood events.
ICA analysts point out that Australia remains one of the most exposed insurance markets globally.
Over 45 years of data place the country second only to the US for extreme weather losses per capita. In the last five years, only New Zealand’s rare quakes and cyclones pushed Australia into third.
Geography plays its part, but population growth in risky regions and older infrastructure unable to cope with climate extremes make the problem worse.
The Federal Government’s Climate Risk Assessment flagged the same vulnerabilities. ICA’s report called for urgent resilience investment: hardening infrastructure, rethinking land use, and updating building standards. A $30bn Flood Defence Fund has been proposed to shield communities most at risk.
Andrew Hall, ICA’s chief executive, said the data showed a clear escalation of losses per person across decades, with costs compounding for households and governments alike.
“Australia is in a global race to ensure its built environment has the resilience needed to protect assets,” he said, warning that underinvestment leaves the public shouldering economic damage that could have been avoided.
Hall argued insurers have priced extreme weather risks for decades, but the gap between actuarial tables and policy response is widening.
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.
Andrew Hall, ICA’s chief executive
Rising rebuilding costs combined with a political push to fast-track housing construction only add strain. Without faster intervention, governments will continue paying bigger recovery bills every year—costs that could shrink with targeted resilience work today.
“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.”
