As wildfires force mass evacuations across France and Spain, NRMA Insurance has warned that Australian insurers face a bushfire risk profile that no longer tracks seasonal patterns – and that a developing El Niño could extend elevated fire conditions across much of the country into late 2026.
The warning, issued July 27, is anchored in the 21st edition of the insurer’s Wild Weather Tracker, drawn from claims data covering March 1 to May 31, 2026, and consumer research conducted by Pureprofile in May 2026 across 3,011 Australians. Read alongside the Australian Prudential Regulation Authority’s (APRA) March 2026 Insurance Climate Vulnerability Assessment (ICVA), CSIRO and Bureau of Meteorology (BoM) projections, and Actuaries Institute affordability data, the findings outline a structural shift in how bushfire exposure should be priced, reserved for, and modelled across the market.
The tracker’s most consequential data point for underwriters is this: NRMA Insurance’s internal claims data shows the average bushfire claim in New South Wales costs 69% more than the next most expensive peril, flood. NRMA received more than 9,000 bushfire-related claims over the past decade, with almost 8,000 linked to the 2019-20 Black Summer event alone. The Insurance Council of Australia (ICA) estimated insured losses from Black Summer at $2.4 billion as of 2024 valuation, making it one of the costliest bushfire events in recorded history.
The January 2026 Victorian bushfires added a further reference point. PERILS revised its insured loss estimate for that event to $860 million, with the ICA escalating the declaration to an Insurance Catastrophe on January 16, 2026. Darryl Pidcock, head of Asia-Pacific at PERILS, commented: “This is the second time – the first being the 2019 ‘Black Summer’ Australia bushfires – that PERILS has reported on an Australian bushfire event at such a high level of detail. Whilst we have observed regular severe convective storm and flood events in recent years, it is a reminder of the impact bushfires can have during a dry and hot summer season.”
APRA’s ICVA found that current annual bushfire losses of approximately $500 million are projected to grow faster than cyclone losses under both stress scenarios, with bushfire and cyclone combined accounting for over $1.4 billion in losses by 2050, concentrated in less than 10% of regions. The regulator estimated that around one in seven Australian houses are currently uninsured, and that climate-driven pressure on premiums could significantly widen that protection gap.
The Actuaries Institute’s Home Insurance Affordability and Home Loans at Risk report quantifies the demand-side pressure behind that gap. The proportion of affordability-stressed households – those facing premiums exceeding four weeks of gross household income – rose to 15%, or 1.61 million households, in the year to March 2024, up from 12% in 2023 and 10% in 2022. APRA found that between 2010 and 2025, home insurance premiums rose at an annual average rate of 7.2%, against wage growth of 3.1% annually. Bushfire is among the perils compressing that margin, and the APRA projections indicate the trajectory continues beyond 2026.
NRMA Insurance meteorologist Kathryn Turner drew a direct line between the European fire crisis and Australia’s risk environment, identifying fire-generated weather as the specific mechanism that can render static hazard mapping inadequate. “These occur when a bushfire becomes so intense it generates its own weather, producing powerful turbulent winds and lightning that can lead to long-range ember attacks which rapidly accelerate the spread of a bushfire and start new fires,” Turner said.
The January 2026 Victorian event demonstrated this dynamic in an Australian context with measurable loss consequences. Risk modeller Risk Frontiers described the conditions as the most dangerous since the 2019-20 Black Summer, and the most destructive day – January 9 – saw wind-driven fires outpace containment efforts and generate pyrocumulus and pyrocumulonimbus activity. For catastrophe modellers, events of this character present a specific challenge: they can drive losses into postcodes not flagged as high exposure under standard hazard grids, creating basis risk between modelled and actual portfolio accumulations. CSIRO and the Bureau of Meteorology’s State of the Climate 2024 report found that extreme fire weather has become more frequent and intense than in previous decades, with larger and more frequent forest fires recorded in south-eastern Australia over the past 30 years, and dangerous fire weather projected to become more common as fire seasons lengthen.
NRMA Insurance natural perils manager Peter Chan flagged an increasing probability of El Niño developing later in winter, which could extend dry conditions – already forecast across Queensland, New South Wales, Victoria, South Australia, and parts of Western Australia – into late 2026. Against that backdrop, approximately half the home insurance market has moved to price verified mitigation actions through the Resilient Building Council’s (RBC) Bushfire Resilience Rating scheme. NEMA confirmed that participating insurers are reducing the bushfire risk component of premiums by up to 60%, with households reporting total premium reductions of between 5% and 21%. The Resilient Building Council put annual savings for some households at $840. NRMA Insurance, Suncorp, NAB Insurance (underwritten by Allianz), and CommBank Insurance (provided by Hollard) are currently participating.
The scheme’s scale, however, remains limited relative to the exposed population. More than 63,500 households across 324 local government areas have completed assessments, and more than 19,000 have carried out at least three recommended upgrades, spending an estimated $218 million. The tracker found 42% of Australians do not feel prepared for bushfire and only 6% think about preparing during winter – a demand-side gap that sits directly upstream of claims frequency Policyholders who have cleared gutters, sealed gaps, and established defensible space generate materially different loss outcomes, a relationship that participating insurers are now pricing but that the majority of the exposed market has yet to act on.
The federal government’s Hazards Insurance Partnership released Guiding Principles for resilience investment on March 13, 2026, with members acknowledging that investment in risk reduction is one of the most effective ways to put downward pressure on insurance premiums. Whether that mechanism reaches meaningful scale before an El Niño-influenced fire season materialises remains an open question for portfolio managers across the market.
