This year has been tough for Australians, with one natural catastrophe after another, including the country's costliest flood. As Australia remains vulnerable to extreme weather events, the Insurance Council of Australia (ICA) analysed how these events cost each household.
A report commissioned by the ICA and conducted by think tank McKell Institute showed that the average annual household cost of extreme weather has been $888 over the last 10 years. However, this figure is expected to jump dramatically to more than $2,500 per year by 2050 – totalling $35.24 billion every year (in 2022 dollars) for the direct costs of extreme weather.
Focusing on the recent natural catastrophes, the report found that in 2021-22, insurers paid $6.41 billion from over 300,000 claims across multiple events, $3.9 billion more than the previous 12 months.
Of all the recent extreme weather events, the February-March flood that devastated Queensland and New South Wales (NSW) – also known as Australia's costliest flood and third-costliest natural disaster – has reached $5.28 billion in insured losses from more than 233,000 claims.
Moreover, of all the areas hit by extreme weather events, Brisbane was the local government area that suffered the greatest loss – at a whopping $1.38 billion, followed by Lismore at $508 million.
ICA CEO Andrew Hall said the recent findings emphasise that Australia is clearly facing the impacts of climate change.
“The new data highlighted in our report and from new research from the McKell Institute are stark reminders of the urgent need to invest in strengthening our communities against worsening extreme weather,” Hall said. “Over the last decade, the percentage of all spending in resilience and mitigation has declined in comparison to the money spent on recovery and clean-up, and this is again a reminder [of] why we need the change in policy thinking.”
On the bright side, Australian governments have been working with various sectors and communities to make the country more resilient to extreme weather. Most recently, the federal government introduced a disaster fund proposal to parliament.
