ICA calls for Australian governments to lift funding for extreme weather

ICA calls for Australian governments to lift funding for extreme weather | Insurance Business Australia

ICA calls for Australian governments to lift funding for extreme weather

Australian homes and communities remain vulnerable to extreme weather events despite repeated warnings on the worsening impacts of climate change on the country. As a result, the Insurance Council of Australia (ICA) has come up with recommendations to make the country more resilient to extreme weather.

“Building a More Resilient Australia,” the ICA’s policy platform for the coming Federal election, calls for all Australian governments to double Federal funding to $200 million yearly until reaching $2 billion over the next five years.

The platform, developed in consultation with actuarial consultancy Finity, outlined six measures to make at-risk homes and communities more resilient to flood, cyclone, and bushfires, estimated to save governments and households at least $19 billion to 2050:

  • $522 million for local projects such as flood levees to defend regional towns;
  • $413 million to better protect homes against flood, Australia’s most expensive natural peril, by raising utilities and services above the expected flood line;
  • $221 million to cyclone-proof more than 44,000 homes in northern Australia;
  • $712 million to support the selective reduction of fuel in our forests;
  • $37 million for an improved national flood early warning system, estimated to increase the lead time for flood warnings from 3-5 to 10-15 days; and
  • $10 million to establish a national coastal hazard information database.

The insurance industry plays a major role in the government’s battle against the impacts of climate change, including the reinsurance pool for cyclones and related flood damage in northern Australia.

In a recent statement, ICA CEO Andrew Hall advised the government to boost investment in stronger homes and infrastructure to make communities safer and more resilient in the face of worsening extreme weather.

“Insurers are at the frontline when it comes to climate change and extreme weather. That’s why as an industry, we’re so focused on improving community resilience,” Hall said. “This means subsidies to improve the resilience of the nation’s homes and businesses to cyclone, flood, and bushfire, as well as funding for projects that protect the community, like levees, floodways, and fuel reduction.”

Read more: SCA welcomes cyclone reinsurance pool’s final design

The suggestion is one of 12 policy areas the ICA has identified as requiring reform, modernisation, or investment in the “Building a More Resilient Australia” policy platform.

The platform calls for a review of land-use planning arrangements to strengthen national building codes and prevent home development in areas with a high risk of extreme weather impacts. It also advises states and territories to abolish duties, levies, and taxes on insurance products that only increase premium costs and discourage adequate levels of cover.

Considering the platform’s content, the ICA has commenced a nationwide advertising campaign calling on Australian governments to lessen the impact of extreme weather by committing to this urgent increase in investment.

“Without increased funding, coupled with a change in approach to what we build and where we build it, the risk profile of communities exposed to extreme weather will not change,” Hall said.