The headline figure in last month's Aon and Geoscape announcement was a potential 50% fall in the flood component of premiums. Three things have to happen before any property sees it. Aon and Geoscape Australia issued the announcement on in September, under a release headlined around groundbreaking technology that could slash insurance premiums. Aon's initial modelling found 13 per cent of properties in flood zones could see the flood-specific portion of the premium fall by more than half once measured first floor elevation replaced the height insurers currently assume.
Tom Spencer (pictured left), head of product for Geoscape said the dataset is moving from a capability Geoscape produces on order to a product available off the shelf, kept up to date on an ongoing basis. James Knight (pictured right), Aon's head of risk advisory for Asia-Pacific put the release at January 2027, at which point Aon offers it to the carriers it supplies and they evaluate it and test its quality and reliability. "And then if successful, they'll obviously bring it into their underwriting and pricing processes to come up with a more sensible risk-based cost for the flood premium," he said.
This is not imported technology being switched on. It had to be rebuilt locally because the overseas versions did not work here.
Read next: The uninsurable coastline: Australia’s growing coverage gap
Geoscape spent a number of years exploring first floor elevation before concluding the available tools were not fit for Australian purpose. "A lot of the technologies that have been developed for other parts of the world don't work that optimally in Australia," said Spencer. The buildings are similar, he said, but not similar enough for those technologies to be effective and that assessment came from the company's own reviews and from users and partners across the industry.
One of the worst performances showed up on Queenslander-style housing: raised structures, commonly built in underneath with garages, sometimes with a raised door and a door or windows at ground level. Spencer said the broader difficulty was with buildings in high flood risk areas, which tend to be complex and to differ from one another.
Geoscape rebuilt the capability over the past year or so to the point where it describes Australian floor levels well. Spencer said the company's focus is a solution that can deliver at scale in Australia, "which doesn't exist today."
Knight pushed back on the suggestion that insurers have been slow to recognise properties that do not fit standard flood assumptions.
"The insurers are doing a good job at understanding or attempting to understand the risk correctly and pricing the risk correctly," he said. The constraint has been supply. Until recently, he said, "this floor level data just hasn't existed en masse."
On that account the dataset is a new input into existing practice rather than a correction to it.
Read next: NIBA flags affordability, climate, and tax strains in home cover
Knight said the practical appeal is that the data slots into infrastructure carriers already run. Insurers across the market use Geoscape's national address, building and parcel datasets, which complement each other and first floor elevation arrives as another field inside that same schema. "The insurer can basically be comfortable with that single source of authoritative data," he said, adding that it also makes the data easier for Aon to manage and maintain.
Geoscape estimates around 1.7 million properties sit inside flood risk locations nationally, covering both floodplains and areas at risk of coastal inundation across every state and territory. How that total divides between residential and commercial property is not established. Asked for a breakdown by type, Spencer said the figure changes as flood definitions change and council-level studies are redone, and that the split was not something he had to hand.
Aon says its data and risk advisory products reach more than 90 per cent of the Australian insurance sector, which is the basis for the claim that the dataset will be offered market-wide. Knight explained that reach as a function of Aon's reinsurance business, where the clients are insurers themselves, extended by advisory relationships with carriers that are not Aon reinsurance clients.
Knight's own caveat on the headline figure sits alongside the sequence. The 13 per cent came from a sample of roughly 55,000 buildings across eight regions in Queensland and New South Wales. Run against the full national database, he said, it "could tell a completely different story."
The technology is real and the modelling rests on a sample. What happens to premiums is a decision carriers have not yet made.
