Australian natural perils generate an average annual cost of $13.5 billion, including insurance losses and intangible impacts, actuarial consultant Finity says.

The total comprises $5 billion for insured costs, including claims from major disasters and smaller events. Other tangible impacts total $4 billion, while intangible expenses are $4.5 billion.

“It is important to not just focus on the insured costs, because the overall costs are much larger,” Finity says. “This is particularly important when evaluating the economic benefits of mitigation and resilience measures.”

The figures make a limited allowance for climate change, with the effects difficult to detect in claims data given the variable nature of extreme events.

“However, attribution studies and anecdotal evidence from individual events indicate how climate change is already affecting the level of risk from disasters. To the extent that the underlying costs are materially higher than indicated by the historical data, our estimate is likely to be too low.”

The intangible costs include deaths and injuries, impacts to mental health, family violence and alcohol abuse, and draw on case studies included in an Australian Business Roundtable report.