A Record-Breaking Winter and Signs of an Extreme Summer

The Southern Slopes (Tasmania) cluster, which covers Tasmania, observed its highest ever extreme high temperature index value. The Southern and South-Western Flatlands (East), which covers part of South Australia, including Adelaide, recorded the third highest extreme high temperature index value ever.

These results align with the Bureau of Meteorology’s observation that maximum temperatures were above average across almost all of Australia^[1]. The Bureau also notes that this was Australia’s hottest winter on record in terms of mean temperature. The mean temperature was 1.53 °C above the 1961-1990 average for the whole country. 

The extreme rainfall index varied by region, with positive index values recorded in the northern parts of the country. This was observed as a widespread, unseasonal rainfall event in the Northern Territory in July, which recorded falls between 10mm and 150mm across the southern Victoria River District, Roper Gulf and Barkly regions^[2]. Meanwhile, negative values were recorded in the south-east.

In mid-September, the Bureau of Meteorology announced that the El Niño-Southern Oscillation (ENSO) entered an El Niño phase. A positive Indian Ocean Dipole phase also began in August.^[3]

El Niño is typically associated with reduced spring rainfall in Eastern Australia and warmer temperatures in the southern two-thirds of the country. Similarly, a positive Indian Ocean Dipole leads to lower levels of rainfall and higher temperatures in Central and South-Eastern Australia.

When the two events occur simultaneously, their effects generally compound. This can increase the severity of their effects as well as how much of Australia is affected.

The Indian Ocean Dipole is predicted to peak in November, while El Niño is forecast to peak in January^[4]. This indicates that the currently observed extreme high temperatures and reduced rainfall may become even more extreme in the following months, which would increase the risk of bushfires. This risk is exacerbated by the large quantities of vegetation that are available following a prolonged period of extreme rainfall during the La Niña phases of 2020 to 2022.

The Australasian Fire Authorities Council released its Seasonal Bushfire Outlook for spring 2023^[3]. It highlights the increased risk of bushfire for large areas of the Northern Territory, Queensland and New South Wales in particular. This is attributed to high fuel loads and the forecast of warmer and drier conditions.

The Index measures the frequency of extreme weather conditions and sea levels across Australia and how these vary over time.

It covers extreme high and low temperatures, extreme rainfall, consecutive dry days, extreme wind and sea level. The Index was launched in November 2018 by the Actuaries Institute and is updated four times a year by Finity Consulting.

Unlike many other measures, the climate index focuses on changes in the extremes. This is a more relevant metric for the insurance industry than averages, as it correlates more closely with damage. This is done by measuring how often we observe exceedances of the 99th percentile of the reference period of 1981-2010. More details and full results can be found on the microsite.

The purpose of the Climate Index is to provide a publicly available measure of extreme weather and demonstrate how the capabilities of the actuarial profession can contribute to the assessment of climate risk.

Alongside the North American Actuaries Climate Index^[4], it is one of two climate indices produced globally on behalf of actuarial associations and has been referenced in the media^[5] and in government reports^[6].

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