Cost of natural disasters

IBISWorld forecasts the cost of natural disasters to skyrocket by 40.2% in 2025-26, to $2.65 billion. The most costly disaster, according to the Insurance Council of Australia, was the damage caused by severe storms and hail across NSW and Queensland on the 20th November 2025, with this catastrophic event causing an estimated $1.3 billion in damages. Other significant disasters have included the Victorian Bushfires in January 2026 and severe storms in South-East Queensland in October 2025. According to the Department of Home Affairs, there have been 64 disasters in 2025-26 through the first three quarters of the year. This number is likely to eclipse the mark of 71 disasters in 2024-25, supporting the increase in damage costs in 2025-26.

Losses from natural disasters exhibit very high volatility, with the damage from each isolated event varying. The costliest natural disaster (in terms of insured losses) over the past five years was the SE Queensland and New South Wales floods that occurred in February 2022. The costs of these floods were estimated to be in excess of $6.3 billion, causing a spike in total costs of natural disasters in 2021-22. Aside from the SE Queensland and New South Wales floods, other recent disasters resulting in costs exceeding $1 billion include severe storms across the Eastern Seaboard around Christmas in 2023 and Ex-Tropical Cyclone Alfred which hit Queensland in 2024-25. These disasters resulted in significant costs particularly due to their impact on densely populated urban areas, resulting in a higher number of homes and businesses facing damages. However, the annual cost of natural disasters has not exceeded $3.0 billion since 2021-22. Overall, IBISWorld forecasts the cost of natural disasters to drop at a compound annual rate of 1.0% over the five years through 2025-26.