Climate change-fuelled extreme weather events may affect “access to insurance”, Reserve Bank of Australia Deputy Governor Guy Debelle warns.

This is among the many consequences the economy can expect as cyclones, droughts, floods and other events become more severe and frequent.

Insurers have already moved to re-price cyclone risks in response to their “frequency and severity”, Mr Debelle says.

“Challenges for financial stability may arise from both physical and transition risks of climate change. For example, insurers may face large, unanticipated payouts because of climate change-related property damage and business losses. In some cases businesses and households could lose access to insurance.”

Policymakers and business leaders need to stop seeing unusual events such as drought in the east as simply cyclical episodes.

“We need to think in terms of trend rather than cycles in the weather,” Mr Debelle said last week.

“Droughts have generally been regarded, at least economically, as cyclical events that recur every so often.

“In contrast, climate change is a trend change. The impact of a trend change is ongoing, whereas a cycle is temporary.”

Climate scientists say the dry spell, described by farmers as the worst they have experienced, is exacerbated by global warming.

Mr Debelle says the drought has cut GDP by about 0.15% and will continue to weigh on the economy this year even if rainfall soon returns to average levels.