Extreme weather, reinsurance, and rebuild costs
Natural catastrophe losses continue to influence pricing and capacity across the domestic market. ICA data shows that extreme weather events in 2025 generated almost $3.5 billion in insured losses from about 264,000 claims nationwide, following five significant or catastrophic events. This compared with $581 million in extreme weather losses in 2024 and $2.35 billion in 2023, illustrating volatility in annual outcomes. The ICA and other market observers link these catastrophe costs to higher reinsurance and capital requirements for insurers, which are then reflected in retail premium rates. At the same time, rebuilding expenses have increased. Sadlier said: “The average cost to build a house has increased some 29% to 30% since 2019,” leaving many sums insured that were considered adequate only a few years ago “well and truly now out of touch.” Consultancies and comparison sites also point to broader operating expenses as a contributor to premium pressure, including administration and staffing costs. Insurers note that changes in premiums continue to depend on individual circumstances such as claims history, location, construction type, and coverage options, with differing outcomes for new and existing customers.