Australia is currently on fire. On Thursday, around 76 fires were raging in Queensland, with nine in New South Wales to the south.
Western Downs (Queensland area) Mayor Paul McVeigh even said to Australian reporters on Tuesday that “some areas are still too hot to get into. Unfortunately, we are expecting that number to go up”.
One wildfire in eastern Australia has reportedly annihilated over 50 homes and consumed 49,000 acres of farmland and scrubland.
Dozens of bushfire warnings are still in place across southern Queensland and northern New South Wales.
At the time of writing, over 10 million hectares of land were on fire all across Australia.
In comparison, all of England’s land area adds up to 13 million hectares. So, the equivalent of almost the entirety of England is on fire.
Some fires are so big that they cannot be put out; they are just controlled by the firefighters. Two people have been reported dead.
This, according to the Australian government, marks the early start of the country’s wildfire season, which typically peaks in the Southern Hemisphere summer.
In the Northern Hemisphere, we typically associate the three months of December–February with colder weather and (sometimes) snow. In Australia, these three months are associated with big fires.
Australian Prime Minister Anthony Albanese said on Tuesday that “these are heartbreaking scenes when people lose their houses. This is a difficult period, and it’s going to be a difficult summer.”
Experts anticipate this upcoming season is highly likely to be the most destructive since the 2019–20 Black Summer fires, which claimed 33 lives, destroyed over 3,000 homes, and burned 19 million hectares of land.
Insurance crisis
As extreme weather events intensify, the maintenance and repair costs for Australian properties—homes, workplaces, and buildings—go up. In response, insurance companies are raising premiums to cover the higher costs of claims and reinsurance.
Insurers are hiking up premiums, some by 10–11% annually, in response to inflation, soaring global reinsurance rates, and Australia’s growing climate risks.
In Sydney, premiums have reached A$20,000–A$30,000 per annum (£10,557–£20,557).
Mat Jones, general manager of public affairs at the Insurance Council of Australia (ICA), said in a comment to Australian SBS News that:
“Reinsurers [the insurers of insurance companies], who are global players, are re-rating Australia. Apart from earthquakes and volcanoes, we get the brunt of all of the extreme weather events. We’ve had flooding, cyclones, and terrible fires, and that risk in Australia is putting upward pressure on premiums.”
With the increased pressure from reinsurers, Australian insurers are forced to re-evaluate insurance costs for people in high-risk areas (and not only).
In flood-prone spots like the Western Sydney Plains, residents are now dealing with not only an increased climate-change-driven risk of floods but also growing insurance costs because they are in a high-risk area.
Insurance bills for storms and floods since January 2020 have cost over $12.3 billion, with 788,000 claims—equal to one in 25 adult Australians, ICA reports.
According to the Climate Council’s 2023 “Uninsurable Nation: Australia’s most climate-vulnerable places” report, the main risk to properties is riverine flooding, which accounts for 80% of the properties expected to be uninsurable by 2030.
Other major threats include bushfires and flash flooding, which will contribute to properties becoming uninsurable by 2030.
Around 520,940 properties in Australia, or one in 25, will be deemed ‘high risk’ and effectively uninsurable due to annual damage costs from extreme weather and climate change by 2030.
Additionally, 9% of properties, or one in 11, will be classified as’medium risk’ by 2030, facing annual damage costs ranging from 0.2% to 1% of the property replacement cost. These properties are at risk of being underinsured.
In a 2022 assessment, the Commonwealth Bank identified approximately 38,000 properties (with mortgages totaling $11 billion) facing significant cyclone exposure risk. Additionally, 56,000 properties (worth $19 billion) were identified as flood-prone, and 5,000 properties (valued at $2 billion) were deemed at risk of fire.
Many currently “at-risk” areas are likely to become “uninhabitable” by 2030, the report asserts.
The Climate Council further notes that, regrettably, in the past eight years, the federal government hasn’t effectively addressed climate change or prepared Australians for increasingly severe weather despite funds being available.
It is then further stressed in the report that the crucial measure for all candidates in the upcoming federal election is their endorsement of policies promoting significant emissions reductions in the 2020s. Investments in national adaptation and disaster risk reduction funding must be increased in order to better equip Australians for increasingly severe weather events.