The ICA’s second annual Insurance Catastrophe Resilience Report uses insurer data and insights to review the last 12 months of extreme weather events and advocate for changes to reduce the impact of future events.
Building resilience
Stronger NSW
Accelerating Climate Action: Policy Recommendations for government
Climate Change Roadmap Towards a Net-Zero and Resilient Future
The ICA’s second annual Insurance Catastrophe Resilience Report uses insurer data and insights to review the last 12 months of extreme weather events and advocate for changes to reduce the impact of future events.
Insurance Council welcomes $800 million NSW flood resilience package
Insurance Council welcomes $800 million NSW flood resilience package
News release
Friday, 28 October 2022
The Insurance Council of Australia (ICA) today welcomed the joint announcement by the Federal and New South Wales Governments of an $800 million Resilient Homes Program to make homes in the Northern Rivers more resilient to flood.
Today’s announcement, in response to the February-March floods that impacted south-east Queensland and coastal New South Wales and in particular the Northern Rivers region, is further recognition by governments that significant sums are required to reduce the risks of extreme weather events to lives and property.
The joint announcement provides:
- $700 million to undertake retrofitting ($50,000 per home), house raising ($100,000 per home) or, in locations where the flood annual exceedance probability is greater than 1 in 5, home buybacks.
- $100 million for land acquisition to provide local options for those who choose to relocate through the buyback scheme.
Updated insurance data released today shows that the devastating floods caused $5.56 billion in insured losses from more than 236,000 claims, with around half of the losses borne in New South Wales. The flood is now the equal costliest extreme weather event in Australia’s history, alongside the 1999 Sydney hailstorm.
The Insurance Council has long campaigned for increased investment in and attention to this issue, and earlier this year released its report, Building a More Resilient Australia which called for state and Federal Governments to jointly invest $400 million each year over five years to improve protections against extreme weather.
Today’s announcement follows Tuesday’s Budget, which formalised the Albanese Government’s commitment to its half of this requirement, as well as establishing a forum for cooperation between the Government and the insurance sector to address extreme weather issues.
It also follows an announcement earlier this year of a similar $741 million package jointly funded by the Queensland and Federal Governments.
Comment attributable to Andrew Hall, CEO Insurance Council of Australia:
Since 2019 insurers have received more than 577,000 claims related to declared flood events to the value of $8.8 billion.
Today’s announcement is a necessary and significant investment in better protecting communities at most risk of flood, and demonstrates that both the Federal and New South Wales Governments understand the scale and complexity of the policy solutions required to begin to address this worsening threat.
We understand that making a decision to sell a beloved home is very difficult one, but we strongly encourage all of those eligible for the buyback element of the Program to take up the offer and relocate somewhere safer and more sustainable.
It is positive to see that those who were covered for flood will not be excluded from the Program.
Perhaps even more important over the long-term than the funding announced today, we are extremely pleased that the Prime Minister has asked the Premier to lead a discussion with other state and territory leaders to reform planning in this country.
For insurers to continue to provide cover at an affordable price and for property and lives to be protected, not only is action required to strengthen the resilience of existing homes and communities, but we must shift our approach to what we build and where we build it.
We look forward to participating in this discussion in coming months.
Budget lays foundations to improve extreme weather resilience
Budget lays foundations to improve extreme weather resilience
News release
Tuesday, 25 October 2022
The Insurance Council of Australia (ICA) said tonight’s Budget has laid the foundations for a significant and bold new start to the approach taken by governments to improve community and household resilience to worsening extreme weather.
Tonight’s Budget includes a $22.6 million package of positive measures that include:
- The creation of the Hazards Insurance Partnership, creating a forum for ongoing collaboration and engagement between insurers, government, and other stakeholders to collaborate to reduce extreme weather risk.
- The creation of a national dataset on insurance affordability, underinsurance, and non-insurance issues to help with policy decision making.
- The creation of a mitigation solutions repository to hold proven and reliable mitigation measures that can be deployed as appropriate to reduce risks associated with different perils.
- Scoping work to identify opportunities for public-private partnerships that reduce risk and put downward pressure on insurance premiums.
The package also includes an intent to develop standard insurance definitions for key natural hazards.
Separately, the Budget formalises the Albanese Government’s commitment of up to $1 billion over five years from 2023-24 (up to $200 million per year) to invest in measures that better protect homes and communities from extreme weather before it happens, through the previously announced Disaster Ready Fund.
The Insurance Council strongly supports the Federal Government’s intent that this fund is matched by the states and territories.
As the representative body for the general insurance industry in Australia, the Insurance Council has long called for more investment and greater collaboration to better protect Australian communities from the impacts of extreme weather.
Earlier this year, the Insurance Council released Building a More Resilient Australia, which called for $1 billion to be invested over five years by the Federal Government, matched by the states and territories, in projects that make Australians more resilient to floods, cyclones and bushfires.
That report found that if matched by the states and territories, an investment of the size announced tonight would provide a tenfold return to governments and households by 2050.
While it is generally a state responsibility, it’s clear that all governments and stakeholders need to collaborate to improve land use planning given the obvious past failures revealed by the numerous floods of the past three years.
Comment attributable to Andrew Hall, CEO Insurance Council of Australia:
The Insurance Council welcomes the Federal Government’s Budget announcement, which is a historic shift in the right direction to better protect homes and communities from the impacts of extreme weather.
The Insurance Council has been advocating for just such an approach for some time, and the fact that over the past three years insurers have paid out more than $8 billion in flood claims alone makes this issue and the Government’s response even more urgent.
The Government has taken this issue seriously since before coming to office, and the Prime Minister, Treasurer, and Ministers Stephen Jones and Murray Watt are to be congratulated for delivering on this important policy agenda.
Given the impacts of worsening extreme weather that are being felt all over the country, the community expects industry, governments, and stakeholders to work together.
Importantly, tonight’s announcement includes the creation of a mechanism to allow that to happen through the Hazards Insurance Partnership.
There is much detail to work out and we look forward to working collaboratively with both the Federal and state governments on this very strong start to solving a long-term problem.
