The Australian insurance industry is renewing calls for stronger disaster preparedness and risk-sharing frameworks as climate-related losses continue to rise and more properties face exposure to severe weather.
Zurich Insurance Group has released a new report warning of the financial implications of worsening natural hazards globally and urging governments to adopt comprehensive strategies to address climate risk.
According to the report, extreme weather events have resulted in approximately $3 trillion in economic damage worldwide over the past 10 years.
Alex Morgan, head of general insurance for Zurich Australia & New Zealand, said the trend is particularly pronounced in Australia.
“The impact of extreme weather on the Australian economy has more than tripled over the last three decades. These events are no longer once in a century, they are the status quo, and communities are not adequately prepared or protected,” he said.
He noted that while insurers play a key role in providing financial protection and risk data, broader systemic change is necessary.
“The insurance industry is uniquely positioned to provide risk intelligence and resilience-based solutions to growing climate risk; however, it is just one part of the solution. The role of public-private collaboration and robust policy frameworks are a necessity if we are to improve community resilience and tackle underlying risk,” Morgan said.
Zurich’s report outlined three primary areas of policy intervention:
New research from Climate Valuation and The Climate Council has revealed that 652,000 residential and commercial properties in Australia – about 4.4% of the national property base – are at high risk of climate-related damage, including from floods, bushfires and coastal erosion. Another 1.55 million properties fall into the moderate-risk category, which may keep insurance premiums elevated.
These figures are based on analysis of more than 15 million properties across 150 electorates and thousands of suburbs.
Under scenarios involving higher emissions, the number of high-risk properties could more than double by 2100. In 86 suburbs identified as “critical climate risk zones,” more than 72,000 properties could become effectively uninsurable if current trends continue.
NRMA Insurance reported that one in six Australians experienced weather-related damage to their property or vehicle over the 2024-25 summer. Its data shows over 18,100 claims were processed due to hailstorms, flooding, and storms across New South Wales, the ACT, and Far North Queensland.
These events culminated with ex-Tropical Cyclone Alfred in early autumn, which alone generated tens of thousands of claims. Insurance Australia Group (IAG) said it received around 10,000 claims from that storm, with wind and water damage making up the majority of reported losses.
Zurich’s report emphasises the need for collaboration between industry, government, and local communities to reduce exposure and improve resilience. The insurer argues that better data, public awareness, and cross-sectoral investment can improve outcomes.
“In Australia, the elimination of development arrangements in high-risk areas, for example, could significantly reduce this underlying risk. Where homes and businesses already exist, improving public disclosure of underlying risk and further investing in ongoing community mitigation and resilience would also have a significant impact,” Morgan said.
