Insurance Challenges Persist In Australia Despite Quiet 2024

SYDNEY, June 19, 2025 - Aon plc (NYSE: AON), a leading global professional services firm, has released its 2025 Climate and Catastrophe Insight Report, which identifies global natural disaster and climate trends to quantify the risk and human impact of extreme weather events in 2024.

Australia experienced one of the quietest years for natural disasters in recent history, with insured catastrophe losses dropping from over AUD$3.6 billion in 2023 to AUD$500 million in 2024. This stands in stark contrast to rising global disaster-related economic losses, which exceeded AUD$562 billion in 2024, more than 10 percent above the long-term average since 2000.

"This was a dramatic year-on-year decline, and for the first time since 1982, there was no declared ICA CAT event in Australia," said Dr. Tom Mortlock, head of climate analytics, Asia Pacific at Aon and adjunct fellow from the Climate Change Research Centre at the University of NSW. “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.”

 

Q1 2025 Natural Disaster Losses Surge to Second Highest on Record

 

Looking at 2025, global insured losses from natural disaster events in Q1 have been preliminarily estimated to reach at least AUD$82 billion, the highest Q1 insured losses since Q1 2011 (AUD$125 billion), and marking the second highest quarterly figure on record. This has largely been driven by events in the United States, such as the California wildfires in January, according to Aon’s Q1 Global Catastrophe Recap.

Despite the reprieve in loss activity in the Pacific region in 2024, Australians continue to face high insurance costs.

"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," said Mortlock. “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. As the recent floods on the Mid North Coast in New South Wales have demonstrated, building resilience to increasing climate risks is a key lever to maintaining affordable and available insurance coverage.”

Read more here: Relief from Disruptive Weather Events but Insurance Challenges Persist.

 

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