Severe Weather Hub

2021 delivered six catastrophic events in Australia, covering a bushfire, two floods, a severe thunderstorm and an earthquake (ICA, 2022).

This activity clearly highlights the variety of natural hazards that Australia is exposed to with none of this activity out of the ordinary. The aggregated insurance loss across 2021 (AUD 2.16b) was slightly above the long-term average of AUD 1.84b (if looking back to 1967). If we look back only over the last decade, 2021 was slightly below an average of AUD 2.31b.

The Impact of Natural Catastrophes


While data from the Bureau of Meteorology has shown us that the recent catastrophes have not been vastly unusual in the cyclical nature of extreme weather, rather, statistics have revealed that the impact of these catastrophes has become increasingly significant.

This increased impact can be attributed to a range of factors, with perhaps the most notable being our expanding population, which has started spreading beyond previous borders. With property and businesses now being built on urban bush interfaces, in the tropics and on flood plains, natural catastrophes now threaten more highly populated areas.

Another consideration is the increasingly global nature of business. With highly interconnected supply chains, businesses are more exposed to the impacts of global catastrophes than ever before. Therefore, regardless of the nature and location of their business, all companies require a rigorous plan that will help them to prepare for worst-case scenarios. This begins with an identification of key threats and potential impacts. Of course, the instinct may be to identify the finite, physical impacts, like damage or loss of property and stock. However, perhaps more notably - and more challenging to quantify - is the impact to business continuity.

In a natural disaster, staff may have difficulty returning to work (whether it is to attend to their own properties or families, or through limited access to transport), pre-arranged offsite centres may face excess demand, and tradespeople will likely be at a premium. Even with agreed fixed prices and service level agreements, in a time of disaster, essential services become hot property, and so access to them can become a challenge. Claims may also take longer than anticipated to be paid, thanks to pressure and demand on the insurers. In other words? Your organisation needs to be prepared to manage through these business disruptions, to not only survive a natural disaster, but to thrive. Because if one thing is for certain, it’s that your competitors will be doing their best to be the first on their feet to secure the business of your customers in this volatile time.

With the impact of natural catastrophes being significant, it is critical that organisations appropriately assess the risks to their entire business model, and that this is appropriately reflected in their insurance policies.

Enlist the help of professionals


Like most risks, understanding the impact of various potential catastrophes can be as difficult as determining the length of a piece of string. Therefore, it pays to enlist the help of professionals who are experts in identifying and managing these risks.

Aon provides this unique service to organisations - to create bespoke, site-by-site plans that show how exposed your business may be to natural catastrophes, what risks exist, and most importantly, how to identify how much cover you require in the instance of a crisis. With a rigorous, tested plan in place, you can ensure that your business is prepared to manage any unfortunate natural catastrophes, and to be safely back on your feet, generating revenue and building your business as quickly as possible.

For more information on how Aon can help your organisation to manage natural catastrophes, please contact us.


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2018 Weather, Climate & Catastrophe Annual Report