Australian insurers are increasingly supplementing premium adjustments with direct investment in climate resilience – funding upgrades at the community and asset level rather than simply repricing risk after losses occur. CHU Underwriting Agencies’ inaugural Green Grant Program, which distributed $50,000 across seven strata communities on July 16, sits within that wider market shift. The scale of the problem it is responding to, however, frames what any individual program can realistically achieve.
The Insurance Council of Australia (ICA) reported that extreme weather generated $4.8 billion in insured losses in 2025 – up 727% on the prior year – across 294,000 claims, with average claim costs rising 39% to $16,471. The ICA has separately projected that the cost of climate-related extreme weather events could reach $35.2 billion annually in Australia by 2050.
There is a specific structural problem within the strata sector that shapes the commercial logic behind programs like CHU’s. In its September 2025 submission to the Victorian Expert Panel Review of the Owners Corporations Act 2006, the ICA warned that many strata buildings face insurance affordability challenges due to structural issues and deferred maintenance, with strata managers and owners corporation committees often poorly equipped to manage the escalating insurance risk and costs that flow from inadequate governance. The ICA has been direct about the consequence: poor governance and deferred maintenance are transforming insurable buildings into high-risk liabilities and driving up premiums, with building defects costing an estimated $1.3 billion annually for residential apartments across Australia.
That dynamic – collective action failure at the owners corporation level – is precisely the barrier a grant program can partially address. By removing the upfront cost for a targeted initiative, an insurer can achieve risk reduction that a building’s own governance structure might not have otherwise approved. CHU has framed its Green Grant Program as designed to remove barriers to sustainability upgrades, particularly for buildings that may otherwise struggle to fund improvements. Grants are capped at $10,000 per application and are restricted to CHU Residential Strata Insurance policyholders – a structure that ties portfolio risk quality directly to the funding mechanism.
CHU is not alone in this direction. IAG established the NRMA Insurance Help Fund in 2025, describing it as a multimillion-dollar initiative supporting climate resilience in Australia. In its inaugural year, the Help Fund allocated $1 million across climate technology innovation, climate leadership development, and community-led resilience projects. The two programs differ in design: NRMA Insurance’s fund targets technology scale-ups and community leaders nationally, while CHU’s ties eligibility to its own policyholder base and funds building-level initiatives directly.
One is a portfolio play; the other a sector-wide innovation investment. Both reflect what the ICA has described as an industry imperative. The ICA has called for enhanced mitigation and resilience investment to ensure strata buildings are resilient to current and future extreme weather, stating that work to de-risk the strata sector must commence now to help lower insurance claims costs and stabilise the cost of insurance over time for consumers.
CHU’s 2025 State of the Strata Market report found that one in 10 Australians currently lives in strata, with more than three million lots across the country. CHU states it covers close to one million of those dwellings. Strata insurance premiums rose 2.8% in the 12 months to June 2025 – from $954 to $981 per lot annually – compared to a 14% surge in house insurance premiums over the same period. That relative stability remains under pressure: claims costs from natural perils are estimated to represent 40% to 60% of a strata insurance premium, and insurance claims from catastrophic events have risen approximately 50% over the past five years, according to Whitbread.
At the regulatory level, the Australian Prudential Regulation Authority (APRA) has stated it will release the results of its Climate Vulnerability Assessment (CVA) for the general insurance sector in the second half of the 2025-26 financial year, following detailed modelling with Australia’s five largest general insurers – findings intended to clarify how insurance affordability may evolve as climate risk compounds.
The seven 2026 CHU recipients span Victoria, Western Australia, South Australia, Queensland, and the ACT. Projects include replacing gas hot water systems with shared heat pump networks in Brunswick, VIC; riverbank restoration in Indooroopilly, QLD; and a recycling initiative in Braddon, ACT, where proceeds from the ACT Container Deposit Scheme will fund fresh produce for people in need.
The program occupies a distinct tier from public-sector equivalents. The federal and Queensland governments’ Strata Resilience Program offers co-contribution grants of up to $150,000 per body corporate for cyclone mitigation works. At $10,000 per recipient, CHU’s program targets community-benefit and sustainability upgrades that infrastructure-scale funding does not typically reach. Kimberley Jonsson, chief executive officer of CHU, pointed to the upfront cost barrier the program targets. “So often, initiatives like these offer huge benefits to communities in the long-term, but come with a high upfront price tag,” Jonsson said. Applications for the next round are expected to open later in 2026.
