The Australian insurer Insurance Australia Group (IAG) has released the third edition of its Severe Weather in a Changing Climate report, developed in partnership with the U.S. National Science Foundation's National Center for Atmospheric Research.
The 128-page report, citing over 360 scientific publications, shows climate change is impacting the severity, frequency and geographical distribution of weather events, and that the risk to Australian communities is increasing, with many natural hazards worsening in a warming climate.
Key findings of the report include:
1. Short-duration intense rainfall and associated flash flooding, as well as fire weather risks, are of particular concern as they are escalating at a very fast pace.
2. Large-to-giant hailstone risks are increasing at the fastest pace over the most populated regions, notably the Brisbane-Sydney-Melbourne corridor of Australia, while northern regions have declining risks.
3. Tropical Cyclone risks are rising most in southeast QLD, northern NSW and southwest WA, with potential for more intense tropical cyclones even though frequencies are likely to slowly decline.
4. Sea level rises around Australia are accelerating at a rate close to the high emissions scenario (SSP 5-8.5). While this risk has had a low insurance impact up until now, it will become a growing issue by mid-to-late century.
As one of the leading general insurers in Australia, IAG has a long history of advocating for climate action, recognising that the changing climate and its impacts are intrinsically linked to its business and the communities it serves.
IAG managing director and CEO Nick Hawkins said, “The Severe Weather in a Changing Climate Report underscores our commitment to climate research and analysis to inform decision making and engagement with government, industry and communities as we seek to drive greater awareness and collaboration.
“The report reinforces the need for broad-scale collaboration and urgent implementation of regional, national and global mitigation and adaptation plans to help manage the transition and physical, psychological and economic risks,” Mr Hawkins said.
The concerning trends in a warming climate highlighted in the report include:
• Land surface temperatures in Australia have risen 1.6°C between pre-industrial (1850-1900) levels and 2020.
• The global average temperature in 2024 exceeded 1.5°C above pre-industrial levels for a full calendar year for the first time on record.
• The growth rate of global CO2 surged to the highest rate ever recorded in 2024, and atmospheric CO2 concentrations are at the highest level in at least 800,000 years.
• Global greenhouse gas emissions are extremely unlikely to reduce enough over the next two decades to follow the 1.5°C+ trajectory.
• It is increasingly probable that warming will exceed 2°over pre-industrial levels, with 3.0°C or higher an increasing possibility before the end of the century.
• Global mean sea surface temperatures increased by 1.15°C above pre-industrial levels in 2024; warmer ocean temperatures fuel tropical cyclone development and provide a moisture source for heavy rainfall.
The US National Science Foundation’s National Center for Atmospheric Research (NSF NCAR) deputy director and scientist Dr James Done said, “Climate change requires a collective and urgent effort from business, industry, government, communities and individuals. We now know the warming and moistening of our atmosphere, driven by increasing emissions is a key driver of the uplift in volatile weather. Our challenge is to work together to integrate scientific understanding with risk mitigation and adaptation strategies.”
The report builds on two previous editions (2019 and 2020) and draws on the latest national and international peer-reviewed scientific research to analyse how climate change is influencing weather patterns and what future conditions may look like in a warming world.
Since 2020, Australia has experienced 14 declared catastrophes and eight significant weather events. The insurance industry has paid A$22.5 billion in insured costs for extreme weather events over the past five years, an increase of 67% on the previous five years.