The estimate of insured losses from flooding in NSW and Queensland in February and March has risen to $5.56 billion, equalling Sydney’s 1999 hailstorm.

The two catastrophes share first place for the costliest extreme weather events in Australia’s history, the Insurance Council of Australia (ICA) said today.

The only other Australian catastrophe to surpass $5 billion in insured losses was 1974’s Cyclone Tracy, which hit Darwin on Christmas Day, demolishing or badly damaging 90% of homes and killing 65.

ICA data shows since drought broke in February 2020, flood-related events have generated close to 600,000 insurance claims valued at $8.8 billion. The February/March event generated 236,000 claims, split between NSW and Queensland.

The current insurance flood catastrophe in Victoria, NSW and Tasmania has so far generated 14,481 claims since October 12.

“For insurers to continue to provide cover at an affordable price and for property and lives to be protected, not only is action required to strengthen the resilience of existing homes and communities, but we must shift our approach to what we build and where we build it,” ICA said.

Actuaries Insitute CEO Elayne Grace says this week’s federal Budget sets Australia on a solid path to help “reduce the worst risks of a changing climate”. The frequency of extreme weather events and natural disasters across the country in recent years highlights the need for collaborative and urgent action to improve resilience, she says.

Ms Grace told insuranceNEWS.com.au today there had been a step change in attitudes and responsiveness.

“There's much more of an understanding and less of a blame game, which is more of an acknowledgement of the risk being increased,” she said.

“It impacts right throughout Australia. We'll see that now - impacting food prices and other things. It's a whole of Australia problem and I think that's why we're finally seeing all of the government's working together to try and deal with this.”

Severe flooding in low-lying areas such as NSW’s Lismore had “really focused the minds of everybody that this needs to be dealt with, we cannot deal with this just on a post disaster basis”.

"It was good to see more of a focus in the federal budget this week on resilience, working out stuff before,” Ms Grace said.

“We appreciate it's very difficult for people to move and to leave where they've been brought up but ultimately, for people's mental health, it's not good to be dealing with so many catastrophes in a year. It's not sustainable.”