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The Insurance Council of Australia (ICA) has revised its projections for insurance losses due to extreme weather in 2025, elevating the estimated figure from $3.5 billion to $4.8 billion. This increase reflects rising costs and a surge in claims.
One of the key contributors to this adjustment was a severe storm accompanied by hail in November, which resulted in nearly 93,000 insurance claims. The damages amounted to $1.78 billion, encompassing vehicle hail damage, shattered glass, damaged roofs, and homes flooded by stormwater and felled trees.
In contrast, a weather event named Alfred, although generating a higher number of claims at 133,000, incurred lower costs, totaling around $1.5 billion.
Queensland bore the brunt of the financial impact, accounting for four out of the five costliest extreme weather events. The North Queensland floods and the spring storms in south-east Queensland alone inflicted damages of $316 million and $895 million, respectively.
“Queensland is accustomed to facing extreme weather, but experiencing four severe events in a single year is significant,” remarked ICA CEO Andrew Hall. “Many communities are still on the path to recovery.”
“The insurance industry is very alive to supply chain challenges and pressures across the construction and transport sectors as a result of ongoing conflict in the Middle East.
“The reality is, these cost increases will add to the already stubbornly high price to rebuild and repair homes when they are damaged.”
The ICA also found across the country, insurers handled almost six times as many claims from extreme weather in 2025 than the year before, costing $4.8 billion in insured losses and a whopping $8.6 billion when adding the wider economic costs.
The most effective way to protect communities and ease cost pressures is to build the flood levees, dams and other large-scale infrastructure that keep homes and businesses out of harm’s way,” Hall said.
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