Insurance Council of Australia

Disaster & catastrophes

Buildings need to be made more resilient to cyclones

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Buildings need to be made more resilient to cyclones

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News release

Thursday, 2 December 2021

A new report released today by the Insurance Council of Australia (ICA) has found that Australia’s houses are not resilient to tropical cyclone hazards, which are expected to become more severe as the climate changes.

Prepared for the ICA by James Cook University Cyclone Testing Station in association with Risk Frontiers, the Tropical Cyclones and Future Risks report outlines the changes required to building codes and construction standards to improve the cyclone resilience of new homes, and calls for greater investment in the retrofitting of old homes to protect property and lives.

The insurance claims cost for tropical cyclones since 1967 stands at $23 billion, and Cyclone Tracy remains Australia’s costliest natural disaster with a $5.5 billion insurance bill (figs normalised to 2017 values).

The report draws on industry-wide policy and claims data from recent tropical cyclones in North Queensland, with a combined claims cost of $3.83 billion, and incorporates the damage report from Western Australia’s Tropical Cyclone Seroja earlier this year.

It finds that unless significant changes are made to both the design method and criteria for new houses the impact and losses from these events in Australian communities will only increase from an already high base.

A key recommendation of the report is that Australia’s National Construction Code considers resilience in all new property construction to reduce the damage, loss and disruption to communities caused by cyclones.

The report also recommends that federal and state governments support the development and expansion of household resilience schemes, such as the now-defunct North Queensland Household Resilience Program, which can help to reduce insurance premiums and better protect householders and communities.

The report is the second in the ICA’s Climate Change Impact Series, and follows a report released last month on the impact of actions of the sea. The final report in the series on flood impacts will be released in coming weeks.

Quote attributable to ICA CEO Andrew Hall:

At present no region in Australia is uninsurable, however if the severity of extreme weather events increases as predicted it is possible some regions may become difficult to insure in the future.

Australia’s modern houses are not resilient to the tropical cyclone hazard of today, and the National Construction Code must consider resilience for all new property construction if we are to keep all of Australia insurable.

Implementation of stronger building codes and retrofitting programs, improved land-use planning, and permanent physical mitigation measures, where necessary, will be key to ensuring an insurable Australia.

Useful links

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New report finds $30B needed to protect coastal communities

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New report finds $30B needed to protect coastal communities

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News release

Wednesday, 17 November 2021

A new report released today by the Insurance Council of Australia (ICA) estimates that Australian Governments will need to invest $30 billion in large scale coastal protection and adaptation projects over the next 50 years, as climate change makes coastal communities, property, and infrastructure increasingly vulnerable.

Climate change is driving rising sea levels and exacerbating coastal hazards known as ‘actions of the sea’ such as tidal inundation, coastal and estuarine inundation, coastal erosion, and shoreline movement.

The report, prepared for the ICA by Baird Australia, has found that as these events increase in frequency and intensity, a growing number of exposed properties in Australia will become uninhabitable.

The June 2016 storm that eroded the beach and private land on Sydney’s Northern Beaches is a stark example of this phenomena, with the almost completed mitigating infrastructure costing the local government and homeowners an estimated $25 million.

Insurance cover for actions of the sea is generally not available because of the inherent risks and is further constrained because of the growing risks from climate change impacts.

With insurance largely unavailable, the report recommends building greater protections for communities exposed to actions of the sea through three areas of activity and investment:

  • Investment in coastal protection infrastructure where these can be shown to be economically and environmentally feasible
  • Improved and coordinated data collection by local, state and federal governments to build a comprehensive picture of the scale of the problem
  • Land use planning that considers actions of the sea, including in some cases making difficult decisions about the long-term viability of existing communities or property

The estimated $30 billion investment in large scale coastal protection and adaptation projects over the next 50 years represents just 1.2 per cent of the average yearly infrastructure spending by all local, state and federal governments.

The report finds that with this modest investment significant returns can be realised through avoided damage and financial loss for individuals and avoided community economic loss due to disruption.

However, the Baird report finds there are limits to mitigation and in some cases adaptive management and planned retreat from coastal hazard zones may be the best long-term community option.

The report recommends urgent action by federal and state governments to build a coastal hazard information database to measure and monitor actions of the sea as sea levels rise.

Quote attributable to ICA CEO Andrew Hall:

Legacy planning decisions by Australian governments have left some coastal communities, homes and infrastructure highly vulnerable to actions of the sea like tidal inundation and coastal erosion.

It’s estimated that over the next 50 years governments will need to invest at least $30 billion in large scale coastal protection and adaptation projects as climate change makes actions of the sea worse.

Insurers are generally not able to cover ‘actions of the sea’ because of the nature of the risk, but we can improve protections for communities and property owners by raising awareness of the risks, improving data and understanding, and advocating for investment in mitigation and adaptation projects.

The insurance industry stands ready to collaborate with governments to share our risk intelligence to help mitigate these growing challenges, for example working together to set robust land planning and building codes which play a critical role in reducing risk to property holders and enabling affordable insurance.

The Actions of the Sea summary report is available at Climate Change Impact Series: Actions of the Sea and Future Risks (insurancecouncil.com.au)

 

Useful links

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icon Climate Change Impact Series: Actions of the Sea and Future Risks

Insurers welcome updated emergency response protocol

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Insurers welcome updated emergency response protocol

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News release

Thursday, 11 November 2021

The Insurance Council of Australia today welcomed the adoption by all States, Territories and the Commonwealth Government of Emergency Management Australia’s updated protocol, which now classifies insurers’ disaster response personnel as emergency responders.

The adoption of the protocol will assist communities to access more timely and consistent help from insurers in the crucial period immediately after a disaster, however, more can be done to further expedite the movement of responders across state borders.

The ICA also welcomed the new measure in the EMA protocol to limit to within 72 hours processing times for cross-border applications to deploy personnel.

The EMA protocol provides a consistent, time-measured and risk-based approach, applied across Australia to reduce the complexity of inter-state movement for emergency responders.

The inclusion in the protocol of general insurers’ disaster response personnel - including claims assessors, loss adjusters and claims specialists - should expedite and not unreasonably impede the movement of personnel, and the ICA thanks the Commonwealth, State and Territory Governments for adopting this sensible approach.

However, more can be done to reduce red-tape and speed up the approvals process by replacing ad-hoc state-based approvals procedures with a nationally consistent approach.

The deployment of insurance disaster responders from interstate is necessary because there are often not enough local claims specialists or trades to meet the needs of those impacted by severe weather.

With border restrictions still in place in some jurisdictions, the ICA in its Industry Action Plan is calling on the State and Commonwealth governments to urgently agree to a nationally consistent approach to the movement of fully vaccinated insurance disaster responders across state borders.

Modelling undertaken for the Insurance Council found that if an event the size of 2017’s Cyclone Debbie occurred now and insurers were delayed by border restrictions by seven days, a total economic shortfall of $687 million would result over the eight weeks following the event.

Comment attributable to Andrew Hall, CEO Insurance Council of Australia:

Timely deployment of insurers’ personnel and contractors to assist customers in the immediate aftermath of a severe weather event is essential in assisting communities to recover and rebuild.

While we welcome the inclusion of insurers in the emergency deployment protocol and the requirement that cross-border approvals be processed within 72 hours, more can be done to better ensure communities have more timely access to the help they need.

Exemptions to allow insurance disaster responders to enter a state have to be negotiated every time a border is closed, and in some cases are being declined. The result is uncertainty, delays and setbacks for families and businesses just trying to get their lives back on track.

 

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We acknowledge the Traditional Owners on the many lands the people of the ICA reside and work. We respect and honour Aboriginal and Torres Strait Islanders Elders past, present, and emerging.
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