How 2023 Came To A Close

In 2022, the third La Niña year in a row led to extraordinary weather events across much of Australia. Intense rainfall events affected many parts of Eastern Australia throughout the year. Rivers swelled. Catchments became inundated. And community after community became subject to flooding so severe that entire communities became cut off from each other. Roads and infrastructure failed, and thousands of properties across Australia sustained considerable damage.

The flooding in 2022 was unlike any recent weather events Australia had seen. Even the devastating 2019-20 bushfires, which scarred much of Eastern Australia, were a smaller insurance event than the 2022 floods. As this report has noted, this intense flooding came at the tail end of a three-year period of turmoil and turbulence afflicting Australians.

There was fire. There was a pandemic. There were floods. And this new normal saw the lives of innumerable Australians deeply impacted.

2023 had a quiet start – but did not finish that way 

In contrast to a tumultuous 2022, the start of 2023 was much more benign. Intense rain, hail, and fire events were rare. Major cyclones only affected sparsely populated areas in northern Australia. In fact, 2023 felt like a remarkable return to normal. The pandemic restrictions were a thing of the past, and the extreme weather events seemed to have skipped Australia for most of 2023, offering a welcome reprieve. December, however, saw some significant weather events, including Tropical Cyclone Jasper and catastrophic storms.

“Usually, El Niño means drier and warmer weather. However, there are other climate drivers influencing the Australian weather. The end result is a mixed bag this season – starting with very dry and hot weather in Spring, flipping to a very active thunderstorm season in Summer.”

– Peter Chan, Manager for Modelling, Governance and Major Events at IAG

Globally, 2023 was the hottest year ever recorded 

While fewer weather-related events were observed in Australia in 2023, the effects of a changing climate have been felt worldwide. The average global temperatures in 2023 were the highest on record. 

There were unusual winter heatwaves in South America and deadly heat events in the Middle East, southern Europe, and Africa. These heat events carried with them other natural disasters — bushfires, droughts, and crop damage. Nature’s unpredictability presented an early surprise with Tropical Cyclone Lola severely impacting Vanuatu in October 2023. As a Category 5 system, Lola’s fury devastated infrastructure and communities still recovering from twin cyclones Judy and Kevin from earlier in the year.

Lola was the earliest Category 5 system ever recorded in any cyclone season in the southern hemisphere. 

And while these events can seem a world away to Australians enjoying a relatively mild and calm year, the truth is, these significant weather events abroad are intrinsically connected to the climatic systems that are impacting Australia, too.

Australia’s summer has been hotter than previous years 

For many, the extreme weather of the northern hemisphere summer has sparked concern over what dangerous weather conditions Australians can expect for the remainder of this summer, especially considering the high probability of temperatures reaching the top 20% quintile of temperatures Australia-wide. After three years of La Niña, where Australian summers are comparably cooler and wetter than usual, the declaration of an El Niño in September 2023 did nothing to soothe those concerns. 

In Spring 2023, this strong El Niño pattern operated concurrently with a positive Indian Ocean Dipole to generate very hot and dry conditions across many parts of Australia. This led to dozens of homes damaged or destroyed by bushfires in northern NSW, southeast QLD and southwest WA. Periodic rainfall and residual forest moisture from past years’ rainfall (except for Western Australia and South Australia) have prevented us from seeing conditions like those in the Black Summer of 2019-20. 

The duo of El Niño and positive Indian Ocean Dipole lost its grip on influencing the Australian weather in early Summer as warmer than average ocean temperatures developed and almost engulfed the entire nation’s coastline in December 2023. The extra warmth in the ocean provided moisture and fuel for tropical cyclones and thunderstorms, giving the annual storm season a forceful kick. 

While tropical cyclones tend to be more infrequent during El Niño’s, they can still occur any season, as proven by Tropical Cyclone Jasper making an unwelcome visit in early December 2023 as a Category 2 storm. Crossing the coast north of Cairns, Jasper delivered flash flooding and four days of record-breaking amounts of rainfall to parts of the north tropical coast and Tablelands districts, isolating communities from Cairns north to Cooktown, triggering evacuations in many communities. Some rain gauges on the Barron River reported totals of up to 2,200mm – more than Cairns’ rainfall in an average year. Flood waters flowed over Cairns airport for the first time, closing it down. As the flood waters receded, the full extent of the damage to infrastructure, homes, and businesses was revealed, with the number of claims exceeding 6,300 as of mid January. 

Throughout December 2023, atmospheric conditions were ripe for multiple severe thunderstorm outbreaks due to a warm and humid airmass interacting with a cool upper atmosphere and low-pressure troughs. The thunderstorms brought giant hailstones, damaging winds, heavy downpours and flash flooding across many communities in QLD, NSW, VIC, SA and the ACT, most of which occurred on Christmas and Boxing Day. 

Overall, Australia’s weather outlook can be best summarised as a ‘little bit of everything’ and remains with a recommendation for customers to follow risk management and mitigation advice from brokers, insurers, and governments to avoid substantial losses.

The underlying risk due to climate has changed in Australia 

The frequency and intensity of major natural peril events in Australia in recent years have fundamentally changed the underlying risk profile of the country at large. This means that insurers must consider this evolving paradigm when it comes to accurately pricing risk, as described in this report. For consumers, this new reality is a genuine challenge. It means premiums are likely to continue rising for some time to come. To alter the overall risk profile of Australia in a changing climate, there needs to be a systemic investment in mitigation to address risk in existing high-risk areas, and changes to land planning and building codes to ensure the resilience of our communities into the future.