Australia saw a rare reprieve from costly natural disasters in 2024, with insured losses dropping to their lowest levels in decades even as global catastrophe costs surged, according to the 2025 Climate and Catastrophe Insight Report by Aon.
For the first time since 1982, no natural disasters in Australia were declared as catastrophe events by the Insurance Council of Australia. Insured losses in the country fell from more than $3.6 billion in 2023 to just $500 million last year.
“Last year was a welcome relief from previous years where we saw some of the highest insurance losses from weather events on record in the country,” said Dr Tom Mortlock, Aon’s head of climate analytics for Asia Pacific.
The drop stands in contrast to the global picture. Economic losses from disasters worldwide climbed to over $562 billion in 2024, which is roughly 10% above the long-term average since 2000. Early signs from 2025 suggest another costly year ahead: Aon’s data shows that global insured losses for the first quarter alone are estimated at $82 billion. That makes it the second highest Q1 total on record, largely due to events in the United States, including January wildfires in California.
In Australia, however, lower insured losses have not translated into lower insurance costs.
Mortlock pointed out that the effects of global inflation and underinsurance continue to weigh heavily on households and businesses: “Underinsurance and rising premiums continue to present challenges following significant global inflation in recent years, and the persisting insurance gap continues to be of concern.”
With insurance premiums expected to stay high, Mortlock said the focus now needs to shift from waiting for prices to drop to actively reducing risk. He pointed to the recent floods on the Mid North Coast of New South Wales as a reminder that quiet years don’t erase long-term threats.
“Given the high cost of insurance is unlikely to improve in the short term, it is vital to continue to focus on improving the resilience of homes and businesses to reduce some of the vulnerability in built environments… Building resilience to increasing climate risks is a key lever to maintaining affordable and available insurance coverage,” Mortlock said.
