Roughly half of Australia’s home insurance market will now factor a household’s certified bushfire mitigation into its pricing, after two bank-branded insurers joined a federally funded resilience-ratings scheme – a shift that moves property-level, risk-reflective pricing from a two-insurer arrangement toward broader market practice.
The National Emergency Management Agency (NEMA) said NAB Insurance, underwritten by Allianz, and CommBank Insurance, provided by Hollard, have begun recognising Resilience Ratings, joining NRMA Insurance and Suncorp brands. Participating insurers cut the bushfire component of a premium by up to 60%, NEMA said, with reported total premium reductions of 5% to 21%, and the Resilient Building Council (RBC) put annual savings for some households at $840. The change sits within the Hazards Insurance Partnership’s Guiding Principles for resilience investment, released in March 2026, under which government and insurers committed to recognising risk-reduction activities in pricing and availability while balancing compliance with competition law.
The ratings encode a steep risk gradient. NAB, citing RBC data, said homes rated one to two stars carry an estimated 50% to 80% probability of severe damage in a bushfire, falling to about 7% to 18% at three to four stars and about 1.5% at five stars. That differential is what participating insurers price against.
The expansion lands amid documented affordability pressure. The Australian Prudential Regulation Authority (APRA), in its March 2026 Insurance Climate Vulnerability Assessment (ICVA), estimated that about one in seven Australian houses are uninsured today and that this could reach one in four by 2050 under its stress scenarios – around one million additional homes. APRA found home insurance premiums rose by an annual average of 7.2% between 2010 and 2025, and projected national weather-related losses rising from under $7 billion a year in 2024 to more than $16 billion by 2050. The regulator named household- and community-level resilience measures as one lever capable of narrowing the gap.
Pricing data points the same way. Analytics firm Finity calculated that the average home premium rose 51% between 2020 and October 2025, from $1,940 to $2,938. The Insurance Council of Australia (ICA) reported extreme-weather events cost almost $3.5 billion in insured losses across 264,000 claims in 2025, and estimated insured losses since 2020 at $25.3 billion, or $4.8 billion a year, up 38% on the prior five-year period.
The scheme’s reach remains at an early stage. NEMA said more than 63,500 households across 324 local government areas have completed an assessment through the Bushfire Resilience Rating App, released in October 2023, and that more than 19,000 have carried out at least three recommended upgrades, spending an estimated $218 million. Set against an exposed population the RBC puts at 2.5 million people in high bushfire-risk areas, the figures point to a model that is operating but not at scale. Demand-side readiness also lags: NRMA Insurance’s Wild Weather Tracker found 42% of Australians do not feel prepared for bushfire, and 6% consider preparing over winter. The RBC said total Commonwealth funding is $3.2 million, beginning with a $3 million grant in 2021.
The more consequential development for underwriters may be the scheme’s extension beyond bushfire. NEMA said the app and ratings will be widened to cover flood, storm, and cyclone, with a multi-hazard capability trialled among 1,000 Queensland households and 102 further local government areas on a waiting list. Flood, not bushfire, is the larger affordability problem: the RBC estimates one million Australian homes sit in flood-risk areas, and flood has driven several of the sector’s costliest recent events. Whether insurers will price certified flood mitigation as they now price bushfire work is the open question the trial is built to test.
Adoption beyond the four named brands has not been publicly announced, leaving roughly half the market yet to reflect certified ratings in pricing. The positions of participants also differ in depth: NAB, one of the two new entrants and a founding partner of the RBC, says it is the only bank to have backed the app’s development, co-funding both its 2022 build and its 2025 extension to flood, storm, and cyclone – a deeper commercial stake than recognition alone. The measured pace of wider adoption is consistent with the framework insurers operate within: the Hazards Insurance Partnership, which includes government, the ICA, and insurance and reinsurance participants, has tied recognition of mitigation to competition-law compliance and to a National Insurance Dataset still under development.
Recognition of household mitigation is nascent under other mechanisms too. The Australian Reinsurance Pool Corporation’s (ARPC) cyclone pool, which discounts premiums for structural retrofits rather than app-based ratings, had applied $9 million in mitigation discounts as of Dec. 31, 2025, under 1.4% of its roughly $653 million premium base.
For underwriters, the open questions are less whether mechanisms exist than whether they hold at volume: how a self-assessed, RBC-certified rating is verified at scale, how rated and unrated books are treated in reinsurance, and how ratings feed standardised industry data. Verification currently runs through the RBC’s certification step, which confirms completed upgrades before an insurer recognises a rating; data standardisation is intended to run through the National Insurance Dataset the Hazards Insurance Partnership is developing.
The move intersects with a current review. Assistant Treasurer Daniel Mulino in September 2025 launched the first statutory review of the cyclone reinsurance pool, examining among other things whether mitigation incentives are being maintained. “Resilience and mitigation measures not only help people prepare and protect themselves and their homes, but should also help lower insurance costs,” Mulino said. ICA chief executive Andrew Hall said the ratings system “is an Australian innovation now being studied globally as proof that household-level risk reduction can help improve insurance affordability.”
