Australian federal budget lays foundations to improve extreme weather resilience: ICA
The Insurance Council of Australia has said the new Federal budget has laid the foundations for a significant and bold new start to the approach taken by governments to improve community and household resilience to worsening extreme weather.
In its report, the Insurance Council of Australia (ICA) suggests that as the representative body for the general insurance industry in Australia, it has long called for more investment and greater collaboration to better protect Australian communities from the impacts of extreme weather.
The ICA also affirmed that it strongly supports the Federal Government’s intent that this fund is matched by the states and territories.
The report notes that the budget includes a $22.6m package of positive measures, including the creation of the Hazards Insurance Partnership, creating a forum for ongoing collaboration and engagement between insurers, government, and other stakeholders to reduce extreme weather risk.
The package also includes the creation of a national dataset on insurance affordability, underinsurance, and non-insurance issues to help with policy decision-making, along with a mitigation solutions repository to hold proven and reliable mitigation measures that can be deployed as appropriate to reduce risks associated with different perils.
Scoping work to identify opportunities for public-private partnerships that reduce risk and put downward pressure on insurance premiums is also enveloped within this package, says the report, as well as an intent to develop standard insurance definitions for key natural hazards.
Additionally, the budget formalises the Government’s commitment of up to $1 billion over five years from 2023-24, to invest in measures that better protect homes and communities from extreme weather before it happens, through the previously announced Disaster Ready Fund.
Andrew Hall, CEO of ICA, commented, “The Insurance Council has been advocating for just such an approach for some time, and the fact that over the past three years insurers have paid out more than $8 billion in flood claims alone makes this issue and the Government’s response even more urgent.
“The Government has taken this issue seriously since before coming to office, and the Prime Minister, Treasurer, and Ministers Stephen Jones and Murray Watt are to be congratulated for delivering on this important policy agenda.
“Given the impacts of worsening extreme weather that are being felt all over the country, the community expects industry, governments, and stakeholders to work together.
“Importantly, tonight’s announcement includes the creation of a mechanism to allow that to happen through the Hazards Insurance Partnership. There is much detail to work out and we look forward to working collaboratively with both the Federal and state governments on this very strong start to solving a long-term problem.”
Meanwhile, The ICA recently declared an Insurance Catastrophe for Victoria, Tasmania and New South Wales, with the three states suffering the impacts of severe weather and flooding that started three weeks ago.
As of October 19, the ICA said insurers have so far received 6,350 claims relating to the floods.
Source: Reinsurance News, https://www.reinsurancene.ws/federal-budget-lays-foundations-to-improve-extreme-weather-resilience-ica/