AACI v2.0 Released: Updated Data Provides a Clearer Picture of Climate Risk

Version 2.0 of the Australian Actuaries Climate Index (AACI) has been released, providing a sharper picture of how extreme weather and sea levels are changing across the country.

The Winter 2025 release, which introduces improved data and new regional definitions, highlights the significance of the growing risk of sea level rise on the East Coast. Of all the components in the Index, sea level shows the strongest signal of how the climate has already changed.

The AACI v2.0 incorporates major improvements to data sources and regional definitions. Instead of relying solely on weather station data, the Index now uses reanalysis data. This is a comprehensive, globally recognised, gridded dataset that combines observations from weather stations, satellites and other sources. Reanalysis is widely used in applications ranging from water resource management and renewable energy planning to climate trend analysis and the study of extreme weather events such as tropical cyclones and heatwaves.

This richer dataset delivers much better geographical coverage across Australia. It has enabled the regional boundaries used in the AACI to be refined, giving a more detailed view of climate impacts at the local level. It has also allowed for wind to be included in the composite index, which was previously excluded due to missing historical data. It will also open up the possibility of additional metrics such as soil moisture and sea surface temperature to be included in the future.

The new regions are shown below.

Overall, AACI v2.0 confirms the broad patterns seen in the first version, but it highlights rising sea levels more sharply, particularly along Australia’s east coast. Of all the components of the AACI v2.0, sea level shows the greatest increase since the reference period (of 1981-2010), well in excess of the changes seen for other metrics. 

The sea level index roughly doubled between v1.0 and v2.0 for Australia as a whole, and some regions saw markedly higher increases. One of the main drivers of these changes is the much better data coverage for the sea level metric, which allows for easier detection of key trends.

The most recent AACI results, for Winter 2025, continue to show elevated sea levels along the East Coast. The Queensland Temperate Coast and Tasmania recorded their highest sea level index values on record, while the Queensland Wet Tropics recorded its second highest.

This aligns with the 2024 State of the Climate ^[1] Report, which found sea level rise has been especially pronounced off New South Wales. The sea level index for the coast of New South Wales shows a strong positive trend, with the third highest value being registered in the Winter of 2025.

It also aligns with the first National Climate Risk Assessment ^[2] , which warns that by 2050, more than 1.5 million Australians could be exposed to coastal flooding risk.

These results reinforce key findings in the National Climate Risk Assessment, which identified Queensland as a particular hotspot for coastal risks. Of the 20 most exposed regions nationally, 18 are in the Sunshine State.

Other Winter 2025 results show: 

• the extreme rainfall index was below the reference-period average, indicating fewer occurrences of extreme rainfall events; and
• both the extreme low and high temperature indices were positive for the country as a whole, though less elevated than in recent periods, indicating temperatures throughout 24-hour periods remain elevated above the reference-period average and reflecting the warming climate.

This analysis supplements reporting from the Bureau of Meteorology ^[3] which focuses on changes in averages.

Longer term, the other clear signal from AACI v2.0 is the frequency of extreme high temperatures have increased, especially in the Northern Territory and parts of Western Australia and Queensland. These regions already face significant heat stress risks, affecting livestock, crops, electricity demand and outdoor workers ^[4] .  

Background

The Index measures the frequency of extreme weather conditions and sea levels across Australia and how these vary over time. Components cover extreme high and low temperatures, extreme rainfall, consecutive dry days (as an indicator of drought), extreme wind and sea level. The Index was first launched in November 2018 by the Actuaries Institute and version 2.0, which includes enhancements not available at the time of the original Index, was released in 2025. It is updated four times a year by Finity Consulting for the Actuaries Institute.

Unlike many other measures, the AACI focuses on changes in the extremes. This is a more relevant metric for the insurance industry (and others) than averages, as it correlates more closely with damage. This is done by measuring how often we observe the current quarter’s observations exceeding the 99th percentile of the corresponding observations in the reference period of 1981-2010. More details and full results can be found on the website .

The purpose of the AACI is to provide a publicly available and objective measure of extreme weather conditions and sea level and is one way in which the actuarial profession can contribute to the assessment of climate risk.

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

References

^[1] Bureau of Meteorology. (2024). State of the Climate 2024. http://www.bom.gov.au/state-of-the-climate/2024/documents/2024-state-of-the-climate.pdf

^[2] Australian Climate Service. (n.d.). National Climate Risk Assessment. https://www.acs.gov.au/pages/national-climate-risk-assessment

^[3] Bureau of Meteorology. (n.d.). Climate monitoring graphs: Seasonal climate summary for Australia. https://www.bom.gov.au/climate/current/season/aus/summary.shtml

^[4] Australian Climate Service. (n.d.). National Climate Risk Assessment. https://www.acs.gov.au/pages/national-climate-risk-assessment

^[5] Australian Actuaries Climate Index. (n.d.). https://actuariesclimateindex.org/home/

^[6] For example, Royal Commission into National Natural Disaster Arrangements. (2020). Australian Actuaries Climate Index: Some comments on extremes [Exhibit 1-006.003-SHP.5010.0010.0001]. https://naturaldisaster.royalcommission.gov.au/publications/exhibit-1-006003-shp5010010001-australian-actuaries-climate-index-some-comments-extremes