A large, slow-moving tropical system is generating heavy rain, flooding, and the risk of a new cyclone across several Australian states, with implications for claims volumes, accumulation risk, and operational planning for insurers and reinsurers in the coming days.
A tropical low over central Australia is producing substantial rainfall across Queensland, South Australia, the Northern Territory, New South Wales, and Victoria, with flood watches and severe weather warnings issued for a broad area. In Queensland, Mount Isa has recorded about 318 millimetres of rain since Feb. 1, making this its wettest February on record and surpassing the previous monthly mark of 282.5 millimetres set in 1926. Nappa Merrie station in far southwestern Queensland received 169 millimetres in the 24 hours to 9am on Feb. 25, close to or above its typical annual rainfall range of about 100 to 200 millimetres. In South Australia’s North East Pastoral region, Moomba Airport has already exceeded its average annual rainfall of 173.4 millimetres after almost 50 millimetres fell in a single day. In the Northern Territory, Alice Springs has had rain on 15 days so far this month, including a nine-day sequence earlier in February, taking its February total to about 180 millimetres and moving toward record levels.
Authorities have advised residents in western NSW communities including Tibooburra, Broken Hill, Wilcannia, White Cliffs, Wanaaring, and Menindee to remain indoors and avoid nonessential travel. Forecasts indicate rainfall totals of 50 to 90 millimetres within 24 hours, with isolated falls up to 130 millimetres possible, and the potential for rapid creek rises, overland flooding, and hazardous road conditions if intense rain bands pass over the same locations. In Melbourne, almost 600 properties across suburbs such as Malvern East, Alphington, Thornbury, and Carnegie have reported power disruptions linked to the system. For insurers, saturated catchments, prolonged rainfall, and widespread exposures across regional and remote areas increase the likelihood of additional property, motor, business interruption and agribusiness claims, and heighten attention on infrastructure and supply chain vulnerabilities.
Alongside the inland low, the Bureau of Meteorology (BoM) is monitoring low-pressure system 29U in the Coral Sea, which forecasters expect could intensify into a tropical cyclone over the weekend. “Over the coming days, we are keeping an eye on this low pressure system. It hasn’t formed quite yet, but the forecast is that it will most likely form over the weekend,” a BoM spokesperson said, as reported by News.com.au. If it develops into a named cyclone, the system could bring additional heavy rain and strong winds to parts of the north tropical coast, including areas around Townsville and Cairns, which are already experiencing an active monsoon period. “At this point, it’s not necessarily one we need to take immediate action on … but for communities in that north tropical coast, we would advise keeping an eye on this forecast,” the spokesperson said.
BoM senior meteorologist Jonathan How said rainfall patterns are likely to shift between jurisdictions as the current low and any Coral Sea system move and interact. “For Northern Territory and Queensland, rainfall may start to ease later on [Feb. 25] into [Feb. 26], but for South Australia and NSW, heavy rain is forecast to continue well into the weekend, even pushing a little bit further south into South Australia from [Feb. 27],” he said, as reported by 9News. The prospect of overlapping riverine flooding, flash flooding, and wind-related damage across several states within a short period is a focus for underwriters, risk managers, and catastrophe modellers, particularly in relation to accumulation hotspots, floodplain exposures, and critical infrastructure.
New data from the Insurance Council of Australia (ICA) show that extreme weather events generated almost $3.5 billion in insured losses from about 264,000 claims in 2025, adding pressure to catastrophe budgets and reinsurance programs. The ICA designated five events as significant or catastrophic:
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The two late-spring storm and hail outbreaks together contributed about $1.4 billion to the annual total, reflecting the impact of convective storm activity on residential, commercial, and motor portfolios. Other events, including flooding in Western Queensland, storms in Casterton and Harden, and bushfires in Halls Gap, also generated claims but were not included in the ICA catastrophe statistics. The council notes that further claims development from 2025 events is expected, which is likely to lift final loss figures above current estimates.
Alongside the loss data, new polling commissioned by the Climate Council points to rising concern among households about the affordability and availability of property cover as extreme weather becomes more frequent and severe. A YouGov survey of more than 1,500 Australians found that 54% of people with home and/or contents insurance are worried that extreme weather will make their home insurance unaffordable or unavailable where they live. Almost half (46%) reported that extreme weather has already contributed to higher premiums. Cost is the main barrier for those without insurance. Among homeowners without cover, 65% identified cost as the key issue, as did 53% of renters. One in five people (22%) who currently hold home and/or contents insurance said they are likely to consider going without insurance if extreme weather and premiums continue to rise.
Data for 2023 indicate that about 5.1% of Australian households were underinsured and 3.3% were uninsured, representing more than two million people with limited or no financial protection for property losses. For insurers, brokers, and policymakers, these figures point to growing protection gaps in higher-risk regions and have implications for risk-based pricing, mitigation investment, public policy settings, and any future resilience or pooling mechanisms.
The early weeks of 2026 have already brought multiple natural hazard events, including bushfires in Victoria and monsoonal conditions in North Queensland, adding to the current flood and cyclone risk profile. Insurers are processing claims from these events and have staff operating in affected communities. With a persistent tropical low over central Australia, extensive flood watches in force, and a Coral Sea low with cyclone potential, insurers and reinsurers are preparing for another active period of natural peril exposure. Sector participants are focusing on real-time accumulation monitoring, testing catastrophe models against emerging hazard patterns, reviewing reinsurance arrangements ahead of renewal, and assessing how they work with governments and communities on mitigation and land-use planning in exposed regions.
