Insurers welcome $50 million boost in mitigation funding

Insurers welcome $50 million boost in mitigation funding | Insurance Business Australia

Insurers welcome $50 million boost in mitigation funding

The Insurance Council of Australia (ICA) has welcomed the Senate’s decision to increase mitigation spending by $50 million a year – a move which it said is “a leap in the right direction” toward helping prevent or reduce the impact of extreme weather to vulnerable communities.

ICA CEO Rob Whelan said investments in permanent mitigation was a “much more sensible use of taxpayer funds,” rather than handing out money after natural disasters.

“The Insurance Council and its members are delighted, as should hundreds of thousands of Australians living in regions exposed to floods, cyclones, severe storms, and bushfires,” Whelan said. “This is a timely decision, which comes at the start of disaster season. Already, many communities have felt the effect of early-season bushfires, and the cyclone season is just around the corner.”

Just last month, the Australian Prudential Regulation Authority (APRA) called for increased investments in mitigation and resilience, as well as the removal of punitive taxes on insurance, to reduce insurance premiums in northern Australia.

Read more: APRA wants action on northern insurance crisis

“Today’s decision by the major political parties in the Senate adds $50 million a year to the amount the Commonwealth will be able to spend,” Whelan said. “Though it is unclear what the total annual mitigation budget will be, we believe it will be much closer to the $200 million-a-year federal investment the Productivity Commission recommended in 2014.”

The ICA is now also urging state and territory governments to commit to significant investments in mitigation.