Communities where at least half of residents hold some form of insurance are five times more likely to record high or very high financial resilience than communities below that threshold, according to the Australian Resilience Index released by Zurich Financial Services Australia.
The same communities are four times more likely to record high or very high health resilience. The index scores close to 2,500 Australian communities and is the first dataset to measure insurance penetration against resilience outcomes at local area level rather than at the level of the individual policyholder.
Zurich developed the index with the economics firm Mandala Partners, the RedBridge Group and Accent Research, drawing on approximately two million proprietary and public data points. Communities are defined using the Australian Bureau of Statistics Statistical Area Level 2 classification, and each is scored across four dimensions: financial, health, social, and environmental resilience.
Financial resilience is measured through income and employment, debt, access to emergency funds, superannuation balances, reliance on government payments, and insurance penetration. The index identifies the financial dimension as the strongest single predictor of overall resilience, ahead of health, social, and environmental factors.
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It does not disaggregate the coverage measure by insurance type, so the correlation holds across general, life, and health lines collectively rather than isolating any one of them.
Queensland records the weakest financial resilience of any state, with 13 per cent of residents in the high or very high band, level with Tasmania. The Australian Capital Territory ranks highest at 28 per cent, ahead of the Northern Territory at 25 per cent, Western Australia at 21 per cent, New South Wales at 19 per cent, and Victoria at 18 per cent.
Overall resilience ranks differently. The Northern Territory has the highest proportion of residents in the low or very low overall band at 37 per cent, pulled down by social and environmental scores rather than financial ones, with 74 per cent of residents in the lowest two categories for environmental resilience. The ACT sits at the opposite end with 41 per cent of residents in the high or very high overall band.
At community level, Cottesloe in Western Australia scored highest, with insurance penetration double the local average and superannuation balances seven times the national figure. The Tiwi Islands in the Northern Territory scored lowest, with crime rates five times the national average and no hospital within 15 kilometres.
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The geographic pattern broadly tracks where sum insured adequacy is already under pressure, a dynamic examined in our analysis of how construction cost inflation is widening home sum insured gaps.
Around 32 per cent of women fall into the lowest two financial resilience categories, compared with 6 per cent of men. The index attributes the difference to higher rates of single parenting, part-time employment, and lower accumulated wealth. Women are more than three times as likely as men to record low or very low overall resilience.
Men aged 35 to 49 are the most resilient demographic group, with 81 per cent earning above median income against 60 per cent of women in the same age bracket.
How the coverage gap is tracking nationally
The index arrives against regulatory modelling pointing in the same direction. The Australian Prudential Regulation Authority (APRA) estimated in its March 2026 assessment, Mind the Gap: An Insurance Climate Vulnerability Assessment, that around one in seven Australian households in freestanding homes is currently uninsured. Under both modelled climate scenarios, that could reach one in four by 2050, equivalent to an additional one million households without cover, with regional and rural areas worst affected.
That projection has already shaped sector debate on affordability and tax settings, as covered in our reporting on NIBA's call for action on home insurance affordability and state taxes, and on the widening coverage gap along Australia's exposed coastline.
Zurich chief executive Justin Delaney positioned the index across both commercial and policy conversations. "Insurance sits at the intersection of these four dimensions of resilience. It protects financial stability when shocks occur, supports health and wellbeing through prevention and recovery services, and relies on – and contributes to – social cohesion and environmental preparedness by pooling risks and supporting communities," Delaney said.
Kos Samaras, director of strategy and analytics at the RedBridge Group, said the absence of financial buffers registers well beyond household balance sheets. "When savings, insurance and super are thin, every shock lands harder, whether it's a rate rise, a health scare, losing a job, or a natural catastrophe. Those communities don't just feel it in their bank balance, they demonstrate it in their trust in institutions and in how they vote," Samaras said.
