IAG managing director and CEO Nick Hawkins (pictured right) has called for a nationwide response to the escalating frequency and financial impact of natural disasters in Australia.
He warned that without structural reforms and coordinated risk mitigation, the insurance sector – and the communities it supports – will face growing strain.
Speaking at the Australian Financial Review Insurance Forum on June 24, Hawkins addressed industry executives and policymakers including Assistant Treasurer Dr Daniel Mulino.
Hawkins emphasised that the surge in extreme weather – including floods, storms, and bushfires – is a national concern that extends beyond insurers and calls for aligned action across government, business, and community sectors.
“Since 2015, the frequency of extreme weather events such as floods, storms, and bushfires in Australia has doubled. A trend bringing significant challenges to people and communities – both physically and psychologically – as well as threats to critical infrastructure,” he said.
Hawkins said that Australia’s general insurers are processing record volumes of claims linked to climate events.
In 2024, insurers paid out $50 billion across 86 million policies, including over $22 billion for home and motor claims. IAG alone disbursed nearly $11 billion in Australia and New Zealand.
According to Hawkins, $22.5 billion in catastrophe-related insured losses have been recorded in Australia over the past five years – 67% more than the previous five-year period.
Hawkins warned that without a sustainable model, insurers may retreat from high-risk areas, leading to reduced access to cover, constrained bank lending, and slower economic recovery after disasters.
Hawkins outlined a suite of proposals supported by the industry, including:
He also called for the removal of insurance taxes and regulatory simplification to reduce overheads and improve affordability.
Access to global capital remains critical for local insurers in managing peak exposures.
Hawkins stressed the importance of international reinsurance relationships, which enable Australian insurers to maintain solvency and offer wide-ranging cover despite growing volatility.
“A strong insurance sector, with ready access to global reinsurance markets, is essential for Australia to manage the growing risks from extreme weather. It will protect our communities in the face of local and global uncertainty,” he said.
Reflecting on the 2022 flood inquiry led by Mulino, Hawkins noted that IAG has since changed its disaster response procedures.
The company is aiming to speed up claims processing, improve communication, and enhance identification of vulnerable customers during crisis periods.
Hawkins’s remarks coincided with new satellite data from NASA’s GRACE mission showing a sharp rise in global extreme weather activity in 2023.
Although not yet peer-reviewed, researchers link the patterns to climate change. Dr Bailing Li of NASA’s Goddard Space Flight Center said that longer-term datasets are required for confirmation but noted the upward trend in hydrological extremes.
FM’s Andrew Stafford said the findings underline the need for stronger climate risk planning in Australia. He also cited FM’s 2025 Resilience Index, which ranked Australia 87th globally for climate risk exposure.
Stafford recommended comprehensive risk assessments, tailored mitigation strategies, and infrastructure evaluations to reduce business exposure.
“At FM, we witness firsthand the catastrophic impact climate events like flooding, cyclones, and bushfires can have on properties, businesses, and the communities they support. But we also recognise that with the right planning and preventative measures, damage and loss can be minimised,” he said.
