By Anthony Willmott

The first National Climate Risk Assessment, released this month, confirms what many in the insurance sector have long known: climate risk is rising, and regional Australia will bear the brunt.  

But the report also exposes something more specific and solvable – a visibility gap in rural insurance portfolios.

The real problem isn’t just the presence of risk. It’s the delta between what is insured and what actually exists. In rural books, it’s not uncommon to find three structures listed on a policy when there are 20 or 30 on the ground. That basic information gap means portfolios are underinsured, risks are mispriced and insurers are increasingly exposed at precisely the moment climate volatility is escalating.

Until this is solved, insurers can’t adequately respond to climate risk, whether it’s acute events such as floods or fires, or chronic stressors such as drought and heat. This isn’t a matter of tweaking existing systems. It’s about recognising that for too long, insurers have relied on blunt tools and broad assumptions. Risk has been priced by postcode or local government area. Yet floods don’t stop at council boundaries. Fire doesn’t discriminate based on region.

The National Climate Risk Assessment rightly identifies agriculture and regional communities as among the most exposed to rising climate threats. It underscores how heat, drought and rainfall shifts are already reshaping viability, asset values and long-term investment.  

But it also, buried in the headline figures, highlights a major limitation in our national response: the lack of granular data. Most analysis still rests on national averages that ignore the on-the-ground variability that defines rural risk.

This is the heart of what we call “climate-blind insurance”: policies and capital flows driven by outdated assumptions, blind spots in coverage, and models that do not reflect the lived experience of producers and rural communities. When risk is averaged, it becomes distorted. And when distorted, it becomes impossible to manage or mitigate.

The consequences are not theoretical. The report estimates climate-related costs could exceed $40 billion a year, even under moderate emissions scenarios. And in agriculture-heavy regions, those costs are already being felt through rising premiums, cover withdrawals, and limited insurability for critical assets.

This compounds the risk of regional retreat. If insurance becomes too expensive or unavailable, capital will flow out of the very communities that need it most.

But this isn’t a doomsday scenario. The shift to smarter underwriting has already begun. High-resolution geospatial tools now enable exposure to be assessed at the level of a single paddock or any proportion of a property. Risk modelling can be proactive, not just reactive, and insurance pricing can begin to reflect both exposure and adaptation.

The tools to close the gap exist. What used to be an impossibility – geolocating every rural property and every structure on it – is now automated.

Just as we use geocoding daily for taxis or groceries, insurers can now use the same technology to shift from text-based addresses to mapped locations, complete with every building, asset, improvement and physical feature. With that foundation, the gap between what is covered by a policy and what is not becomes visible and, crucially, insurable.

With better visibility, we can also start aligning incentives. Geospatial tools now allow insurance terms to reflect true risk and climate-smart practices. Pricing can reward adaptation, not penalise exposure. Public investment can flow to where it delivers the greatest resilience dividend.

Rural insurance is beginning a fundamental shift: from blunt, generic cover to asset-specific, risk-based pricing. What once took weeks now happens in near real time. This isn’t just smarter insurance; it’s how we keep regional communities covered, capital flowing and climate risk from becoming credit risk.

What’s needed now is urgency and alignment, a sector-wide push to operationalise this intelligence. With better visibility, insurers can move from guesswork to accuracy, turning rural blind spots into insurable assets, and preventing claims from blowing out. Policy settings can reflect true risk, and public investment can be channelled to where it delivers the greatest resilience dividend.

The National Climate Risk Assessment is a welcome starting point. But we need to translate insight into action. Insurers, reinsurers, governments and data providers all have a role to play. Farmland remains one of the biggest blind spots in Australian financial systems. Until we bring it into focus, risk can’t be priced properly, resilience can’t be built and the rural economy remains vulnerable.

The climate has changed. Our tools have improved. Now, our systems need to catch up.

Anthony Willmott is the co-founder and CEO of DAS (Digital Agricultural Services), a geospatial technology company