Hailstorms have hurled 8cm plus ice rocks at homeowners across SE Queensland for two straight days - and there could be more storms to come according to Bureau of Meteorology senior forecaster Baden Gilbert. Solar panels have been smashed, roofs are leaking, and at one point up to 20,000 homeowners lost power.
And it’s against that unsettling background that Australia’s largest general insurer, Insurance Australia Group (IAG), has issued a stark warning about the rising costs and frequency of extreme weather, releasing new data that underscores the growing financial and social burden of climate-related disasters.
The insurer’s third edition of Severe Weather in a Changing Climate paints a picture of an Australia facing more destructive storms, floods, bushfires and hail events than ever before—risks that are already straining both the insurance system and community resilience.
The report’s release coincides with the federal government’s National Climate Risk Assessment 2025, which found that by mid-century more than 1.5 million Australians could be living in areas of “high or very high” coastal flood risk if current planning patterns continue.
IAG’s analysis shows that insured losses from severe weather have climbed sharply over the past decade, driven largely by the growing intensity of short, destructive events such as the hailstorms that battered southern Queensland in late October. The storms produced hailstones up to nine centimetres in diameter, damaging thousands of homes, cars and solar panels, and cutting power to tens of thousands of properties.
According to IAG, the compounding nature of these events—multiple, concurrent disasters occurring in rapid succession—represents one of the industry’s most pressing challenges. The company warned that insurers are now responding to overlapping crises that leave communities and recovery systems little time to recover before the next disaster strikes.
The National Climate Risk Assessment released this week describes an environment where hazards interact in increasingly complex ways. The report identifies ten priority climate hazards—including extreme heat, convective storms, coastal erosion and riverine flooding—and concludes that historical weather data is no longer a reliable guide to future risks.
It finds that climate-related losses are likely to intensify even in regions that have previously escaped regular disasters. “Australia’s climate is changing and will continue to change into the future,” the assessment states. “The country is likely to experience more intense and extreme climate hazards, and in some cases in areas where people and places haven’t experienced these hazards before.”
For the insurance sector, this evolving pattern of risk means that premiums, risk modelling and catastrophe planning will all require continuous recalibration. IAG’s report emphasises that the old one-in-100-year event is no longer a meaningful metric in many parts of the country.
Industry analysts say the findings add urgency to efforts to reform land-use planning, building standards and disaster mitigation funding. The Insurance Council of Australia has previously called for a national investment program of at least $2 billion a year to improve flood defences, drainage systems and home retrofits—arguing that every dollar spent on mitigation can save multiple dollars in recovery and insurance costs.
IAG’s report highlights similar concerns, pointing out that risk exposure is growing fastest in regions where population growth, ageing infrastructure and inadequate planning overlap with high natural hazard exposure.
In coastal communities and outer urban growth areas, the insurer warns, rising sea levels, more severe rainfall events and changing storm tracks will place additional pressure on already stretched emergency services and local governments.
Both IAG and the federal government reports make clear that adaptation—not avoidance—will define Australia’s climate response in the decades ahead. The government’s assessment calls for ongoing monitoring of risks across social, economic and environmental systems, while IAG stresses the need for public–private collaboration to strengthen resilience and reduce the protection gap.
For insurers, the message is twofold: expect claims costs to rise as the atmosphere warms, and work to ensure that communities, governments and industry share the burden of managing the escalating risks.
As Queensland residents begin yet another cleanup from hail damage, the industry’s warnings carry renewed weight. With compounding storms, fires and floods becoming the new normal, the gap between insured and uninsured losses—and between preparedness and vulnerability—continues to widen.
