Extreme weather insurance losses hit $4.8b as storms overtake Cyclone Alfred as costliest event

Extreme weather events cost $4.8 billion in insured losses across 294,000 claims in 2025, according to updated figures from the Insurance Council of Australia (ICA), representing a 727 per cent increase on the $585 million recorded in 2024.

The total economic cost is estimated at more than $8.6 billion, with the ICA warning that supply-chain pressures stemming from conflict in the Middle East will add further to rebuilding costs across affected communities.

The figures represent a significant upward revision from the ICA's earlier January 2026 announcement, which put insured losses at $3.5 billion from 264,000 claims.

The increase of $1.3 billion is attributed to further lodged claims and escalating costs from two severe storm and hail events that struck in October and November.

The November Queensland and NSW severe storms and hail event has overtaken Ex-Tropical Cyclone Alfred as the costliest single weather event of the year, reaching $1.78 billion across nearly 93,000 claims.

Alfred, which had been the most expensive event at the time of the January announcement, now sits at $1.5 billion from 133,000 claims.

Queensland bore the brunt of the damage, accounting for $4.18 billion in insured losses across 255,000 claims as the state was hit by four severe weather events in the space of 12 months.

"While Queensland is no stranger to extreme weather, four severe events impacting a single state in 12 months is significant, with many communities still on the road to recovery," says Andrew Hall, the CEO of the ICA.

"Storms and hail are complex events that often have a long tail, meaning claims continue to grow months after the event as more are lodged and assessed.

"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."

Hall says 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".

The ICA is calling on all levels of government to invest in mitigation infrastructure including flood levees and dams to reduce the impact of future extreme weather events on Australian communities.

The October Queensland severe storms event accounted for $810 million in insured losses from more than 48,000 claims, while the September Queensland storms totalled $710 million across approximately 21,000 claims.

Both events contributed to Queensland's outsized share of the national total.

Australia recorded four insurance catastrophe events and four significant weather events during 2025, with the combined toll making it one of the most expensive years on record for the insurance industry.