Stephen Jones on climate change insurance “inequity”

Low income earners disproportionately affected

Stephen Jones on climate change insurance “inequity”

Insurance News

By Roxanne Libatique

The Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, delved into rising insurance premiums in Australia in his recent speech to the attendees of the International Congress of Actuaries (Congress).

On May 29, Jones opened the Congress, identifying the main challenges financial institutions face across Australia.

In his speech, Jones highlighted the impact of climate change on the Australian insurance industry, specifically premiums.

“In Australia, when we talk about the effects of climate change, we no longer use the future tense. And of course, there is an inequity at the centre of all this,” he said. “As we all know, the most exposed communities are in northern Queensland, the Northern Territory, northern NSW, and Western Sydney, where there is a greater threat of extreme weather.”

Jones noted the Actuaries Institute's report that found one million households experience insurance vulnerability, which means 10% of households spend more than four weeks of their gross annual income on home insurance. The report also emphasised the rising rates of non-insurance and underinsurance, especially in disadvantaged communities.

“It is low-income earners who live in areas more likely to be impacted by climate change,” he said. “They are the same people who struggle to afford mitigation work. And they are the same people who are struggling to afford insurance.”

Government's plans

With Australia facing more frequent and severe extreme weather events that lead to rising premiums, Jones said the Albanese government is investing in projects designed to reduce disaster risk and improve Australia's disaster resilience.

“We know that reducing the risk of damage to homes and businesses is the best way to put downward pressure on insurance premiums, particularly for Australians in disaster-prone areas,” Jones said. “We know that investment in disaster mitigation infrastructure works. And we know that the government and insurers share these challenges, and that neither of us can take them on alone.”

32nd International Congress of Actuaries

International actuaries gathered in Australia to discuss some of the major global issues at the 32nd International Congress of Actuaries (ICA2023), including climate change.

Aside from Jones, some of the speakers are:

  • Hon. Kenneth Hayne, former High Court Justice and Banking Royal Commissioner;
  • Dame Inga Beale, former Lloyd's of London CEO;
  • Qantas CEO Alan Joyce; and
  • the Australian Climate Council's Chief Councillor Professor Tim Flannery.

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