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Building a clearer view of natural catastrophe and climate risk in education

Climate risk and natural catastrophe are reshaping how schools protect campuses, plan resilience and support continuity. Learn more.

20/07/2026 · 7 minute read

Learn how climate risk and natural catastrophes are reshaping the way schools protect campuses, build resilience, and maintain continuity.

Australia's natural hazard and climate risk profile shows signs of intensifying. The past 15 years alone have brought the Victorian and Queensland floods, the Black Summer bushfires, widespread east coast flooding in 2022 and 2023, successive severe storm seasons and Ex-Tropical Cyclone Alfred in 2025. This local experience reflects a global trend, with insured losses from natural catastrophes in recent years reaching US$137 billion, the fifth consecutive year above US$100 billion1.

Climate projections for Australia point to hotter summers, more frequent and severe heatwaves, increases in short‑duration extreme rainfall that can trigger localised flash flooding and rising sea levels that increase coastal flood and erosion risk. Natural climate variability, such as  El Niño–Southern Oscillation (ENSO) and the Indian Ocean Dipole, adds year‑to‑year and decadal uncertainty. Drier phases elevate bushfire risk, heat stress and water‑scarcity inland. Projections also suggest a likely reduction in the number of tropical cyclones in the Australian region but a higher proportion of very intense Category 4 and 5 storms. This meaning fewer storms overall, but greater risk from the most severe events. Taken together, these shifts are increasing the scale, complexity and uncertainty of climate risk across Australia.

For educational institutions, the issue is not simply that natural hazard and climate risks are increasing, but what that means for the safety, continuity and resilience of the communities they lead. How many classrooms, administration buildings and boarding facilities are exposed to flood, bushfire, extreme wind or heat? Will more frequent extreme heat days affect the ability to teach and learn safely, and are cooling systems, shaded areas and indoor environments adequate for future conditions? Can critical operations continue during prolonged power outages, and is ageing infrastructure capable of withstanding more frequent severe storms and intense rainfall? These are not abstract environmental concerns; they are immediate governance, operational and capital planning questions that directly influence student and staff wellbeing, the continuity of education and the long-term resilience of the institution.

Clear insight into natural catastrophe and climate risk is the foundation for better decisions on protection, risk financing and recovery.

Start with the risk equation

Natural catastrophe and climate risk is complex, but a simple e

Natural hazard and climate risk = hazard X exposure X vulnerability

quation offers a useful starting point:

  • Hazard refers to the perils that could affect a location, such as flood, bushfire or cyclone.
  • Exposure is the assets an institution owns and where they are located.
  • Vulnerability describes how resilient those assets are when an event occurs.

Most institutions can describe the hazards they face in general terms. Far fewer can do so precisely across a whole portfolio, particularly where schools have grown through amalgamation, operate across multiple regions, or manage ageing or heritage buildings.

That level of precision matters. A clear understanding of exposure is the foundation for every decision that follows. It also changes the conversation with boards and insurers. Institutions that can demonstrate an understanding of where their risks sit, what potential losses could look like and how those risks are being managed present a more credible, aligned risk profile to underwriters, risk committees and trustees, and are better positioned to differentiate their risk in the market.

From data to action

Understanding the risk equation is just the beginning. The next step is turning insight into action across the portfolio. For educational institutions, three considerations are critical:

  1. Understand natural hazard and / or climate exposure - A practical starting point is mapping assets across the portfolio against recognised hazard data for perils such as flood, bushfire, cyclone, wind, hail and heat. This analysis helps reveal:
    • Exposure hotspots and aggregation risk
    • The potential severity of events at each location
    • The value at risk which can be used to compare against existing policy limits and sub-limits
  2. Quantify the potential natural catastrophe and / or climate loss - Exposure tells only part of the story. Vulnerability factors such as construction type, number of storeys, occupancy, finished floor height and year built determine how an event would actually affect each site. Probabilistic modelling brings hazard, exposure and vulnerability together to estimate damage, downtime and financial loss.
    These estimates are what allow limits and sub-limits to be tested for adequacy and enable alternative risk structures, such as higher deductibles or increased retentions, to be evaluated using evidence rather than assumption.
  3. Review the locations that drive loss - Natural catastrophe and climate risk engineering focuses on the sites that contribute most to projected loss. On-site reviews identify existing good practice, alongside location-specific vulnerabilities where mitigation can be improved. Risk recommendations can then be planned, costed and aligned with future capital expenditure, while also informing resilience and recovery planning for the assets that matter most.

For many institutions, access to external specialist capabilities and data plays an important role in achieving a comprehensive and practical view of natural catastrophe and climate risk.

Questions for leadership

Boards and executive teams should be asking:

  • Which assets, services and operational functions are most critical to the continuity of teaching, student care and parish or community activities, and how exposed are they to flood, bushfire, extreme heat, storm and power disruption?
  • Is our existing infrastructure, including classrooms, boarding facilities, cooling systems, drainage, utilities and back-up power, fit for purpose under future hazard and climate conditions, or are targeted resilience investments required?
  • If a major event were to occur tomorrow, do we understand the likely operational, financial and reputational impacts, and do we have the governance, insurance and recovery arrangements in place to resume operations quickly and safely?

If any of these questions cannot be answered with confidence, that gap itself is useful information. It shows where further data, analysis or assurance effort should be directed, well before the next renewal and well before the next event.

Turning insight into better risk and finance decisions

A detailed understanding of natural catastrophe and climate risk enables institutions to turn insight into better, more informed risk and finance decisions. That value typically shows up in six ways:

  1. More informed decision making. Understanding which campuses and critical assets are most exposed helps leaders’ direct capital to the upgrades that reduce loss, support continuity and strengthen the school’s risk profile in insurer discussions. Risk financing and recovery decisions are grounded in evidence, with boards, executives and insurers working from a shared view of risk.
  2. Risk differentiation. Clear insight into site-level exposure gives school leaders a better understanding of where flood, bushfire, storm or heat risk could disrupt teaching, boarding and community operations, while helping insurers assess the portfolio more accurately.
  3. Model-backed program design. Insurance structures can be aligned to real school loss scenarios, including property damage, closure periods, temporary teaching arrangements, boarding disruption and the practical challenges of reopening. These are backed by science and solid risk understanding rather than carried forward by habit.
  4. A strategic approach to risk financing. Better loss insight supports more deliberate decisions about insurance purchasing, retained risk and resilience investment, so the financing strategy reflects the organisation’s actual exposure profile.
  5. Clear focus on loss-driving assets. In many education portfolios, a relatively small number of campuses, buildings or critical services could drive a disproportionate share of potential loss and downtime. Identifying those assets helps schools focus both resilience investment and insurance attention where it matters most.
  6. Targeted resilience improvement. Scenario testing can help schools understand how a flood, severe storm, bushfire or extreme heat event would affect student safety, teaching continuity and reopening timeframes. This supports stronger emergency planning, more effective continuity arrangements and better-informed discussions about business interruption, recovery funding and insurer expectations.

The outcome is fewer surprises, faster recovery, more predictable insurance outcomes and stronger stewardship of community assets.

How Marsh can help

Marsh works with Australian educational institutions to strengthen their approach to property and natural hazard risk. Our education specialists combine deep sector knowledge with broader risk, insurance and advisory capability to help leaders identify priority exposures, strengthen controls and make decisions with greater confidence.

To discuss how Marsh can support your organisation, please contact your Marsh representative or our education team.

1 Source: Insurance Catastrophe Resilience Report 2024-25, Insurance Council of Australia, viewed on 15/06/2025

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.

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