Enhancing disaster resilience:
Lessons from recent events
02 Oct 2025
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Recent natural disasters, from Queensland floods to bushfires and cyclones, have exposed the growing risks faced by Australian businesses and communities. In just five years, it was reported that insured losses from extreme weather in Australia reached $22.5 billion, up 67% from the previous period. Rising flood, bushfire, and cyclone risks now affect businesses well beyond the disaster zone.
More than 1.4 million properties face flood risk, with 300,000 at severe or extreme risk, mostly across NSW, Queensland and Victoria. Premiums are also being driven up by taxes, which can add 20–40% to the cost of insurance.
While insurance remains critical to recovery, real-world events show that true resilience goes beyond coverage. Infrastructure, people, supply chains and communication all play a role in how organisations withstand and respond to disruption.
This blog builds on the insights shared in our earlier analysis of the California wildfires, taking a closer look at how businesses can strengthen disaster readiness with practical, coordinated action.
Being prepared before disaster strikes can make a real difference to how quickly a business recovers, and how much that recovery costs. A business continuity plan doesn’t have to be complex. At its core, it’s about knowing which parts of your business are essential, how to keep them running during disruption, and how to return to full operations without unnecessary delay. The Queensland Government’s guide is a good starting point, covering risk assessments, emergency roles, communication planning and more.
We’ve seen that businesses that plan ahead are not only more resilient, but often better positioned with insurers. This kind of planning extends beyond individual action. The Insurance Council of Australia is urging the Australian Government to prioritise long-term disaster resilience through stronger building codes, improved flood defences and smarter land-use planning. These national goals mirror steps businesses can take now, such as upgrading fire protection systems, improving flood resistance or reinforcing roofing.
Just like households, businesses can take practical steps by reviewing excess options, asking about risk-reduction discounts, and aligning their coverage with continuity plans. The more you can show that risks are being addressed, the stronger your position with insurers, both at renewal and in the event of a claim.
Insurers today do more than just respond to claims; they help businesses anticipate risk and reduce it before disaster strikes. With greater access to climate data, risk mapping and claims trends, many insurers now offer insights that support better decision-making and long-term planning.
From bushfires and cyclones to infrastructure breakdowns, insurers are using real-world data to highlight weak points in operations, particularly in areas where insurance markets are tightening. Some are also introducing parametric cover that pays out based on weather conditions, enabling faster recovery after events like storms or floods.
A recent case demonstrates just how effective this approach can be. An Australian food manufacturer facing a $2.5M annual premium worked with Austcover and risk engineers to address two major exposures: bushfire and internal building fire. By installing ember-proof mesh and upgrading their sprinkler system to meet FM certification standards, the client reduced their overall risk position, made themselves a stronger candidate in the insurance market and produced a premium saving of 40%.
This is where insurance insight evolves into business intelligence, shaping not only protection but also more informed operational decisions.
Recent disasters, both in Australia and overseas, are having a lasting effect on how risk is assessed, priced and managed. Within Australia, the increasing regularity of extreme weather, including flooding, bushfires and severe storms, has placed enormous strain on the insurance sector. These events are no longer rare; they’re now expected.
The 2022 floods across Queensland and New South Wales, for example, led to over 300,000 reported claims, making it the most expensive insured event in Australia’s history. This level of impact revealed just how exposed parts of the country have become, especially in areas where infrastructure, planning or building standards have not kept pace with environmental realities.
As a result, insurers are becoming more selective, and risk-based pricing is shifting significantly. Some regions are facing reduced access to coverage, while others are experiencing sharp increases in premiums and excess levels. For both individuals and businesses, this reinforces the need to plan ahead because securing cover now depends as much on risk mitigation as it does on location.
The 2025 California wildfires have had major implications for the global insurance industry, with ripple effects reaching as far as Australia. These fires resulted in insured losses estimated between US$20 billion and US$30 billion, marking them among the most costly wildfire events in U.S. history. Such significant losses have strained the global reinsurance market, leading to increased costs for insurers worldwide.
When global reinsurers face substantial payouts, they often raise their premiums to recoup losses, a cost that is subsequently passed on to Australian insurers and, ultimately, to policyholders. This chain reaction contributes to higher insurance premiums for Australian consumers, even if they are not directly affected by the events causing the initial losses.
The takeaway is clear: climate-related catastrophes overseas can influence insurance costs in Australia, even for properties outside traditional high-risk zones. They also reveal just how globally interconnected the insurance market has become. Pricing and availability are no longer shaped by local conditions alone — they’re part of a broader, rapidly evolving risk environment that reflects climate pressures from around the world.
The path forward lies in seeing insurance as part of a broader resilience strategy, not a standalone solution. That means taking a more layered approach that connects business continuity plans with insurers, infrastructure upgrades, workforce readiness and climate-informed risk reduction.
For businesses, this could involve reassessing critical dependencies like supply chains, IT infrastructure or utility access. For local governments and developers, it means working alongside insurers to understand where construction, planning and maintenance decisions could have long-term cost and coverage implications.
Future disasters may prompt government-led interventions beyond traditional insurance. We’ve already seen this approach following the devastating Northern Rivers floods of 2022, where the NSW Government introduced a voluntary buyback scheme for properties in high-risk flood zones. In some instances, homeowners were supported to relocate and rebuild in safer areas.
As extreme weather events become more frequent, similar programs could play a larger role in future recovery and resilience efforts, which isn’t just a win for Australians, but also helps stabilise the insurance market. By reducing exposure in the most at-risk areas, these initiatives can ease pressure on insurers, support more sustainable pricing and help preserve access to coverage for communities that remain insurable.
Ultimately, disaster resilience is everyone’s responsibility. It starts with understanding the real risk, acting on expert insights, and building systems that support recovery not just once, but again and again. What we’ve learned should guide not just our response, but our readiness for the next event.
Disaster resilience doesn’t start after the event — it begins with informed planning and the right risk advice. With insured losses rising and coverage becoming more complex, now is the time to align your insurance program with your business continuity goals.
At Austcover, we help you understand your exposure, improve your risk profile and navigate the complexities of today’s evolving insurance market.
All information in this article is of a general nature, and has been prepared without taking into account your individual objectives, financial situation, or needs. Before acting on any information contained herein, you should consider its appropriateness to your circumstances. The information provided is not intended to replace any accounting, financial, insurance broking, legal, tax, or other professional advice. Austcover Pty Ltd ABN 46 073 425 662 holds Australian Financial Services Licence No. 241799. Visit: our legal policies and disclosures page.