NIBA / Special Feature
Looking for Solutions Of course, the fact this challenge exists isn’t news to anyone working in the profession. So, what’s the solution? In NIBA’s pre-budget submission for 2025/26, NIBA CEO Richard Klipin said that insurance can only be one part of the solution for Australian communities. “A proactive approach to disaster mitigation, focused on long-term investments at both community and household levels, will reduce the impact of natural disasters, enhance resilience, and alleviate the financial pressures that increase insurance premiums.” NIBA’s submission proposed expanding the Disaster Ready Fund, introducing a national co-funded household mitigation scheme, and creating an advisory committee to address emerging risks. “Together, these measures represent a critical investment in Australia’s future, helping to strengthen household and community resilience, improve insurance affordability, and ensure communities and businesses can thrive in the face of growing challenges,” Klipin said. Meanwhile, the ICA is calling for a substantial flood defence fund to be established: “We must accelerate investment in reducing the risk itself. This includes embedding resilience in our National Construction Code, reforming land use planning to ensure development no longer occurs in high-risk areas and investing in infrastructure to reduce risk,” says the ICA spokesperson.
“The Insurance Council is calling for a $30 billion Flood Defence Fund to build new defences, strengthen at-risk homes, support managed relocation, and upgrade existing infrastructure. Removing state insurance taxes is also seen as key to easing cost-of- living pressures, given their impact on premiums. “Over the longer term, sustained investment in resilience must be paired with long-term action on climate change. The industry is committed to net zero emissions by 2050 and is working with government and regulators to assess climate risk and close the protection gap. This includes initiatives like the Hazards Insurance Partnership and a Climate Vulnerability Assessment with APRA, alongside research, policy advocacy, and our industry-wide climate roadmap.” Bazen believes a combination of pragmatic action and risk-sharing funding could hold the key. “Mitigation of risk primarily needs to focus on moving assets to lower-risk locations, such as moving towns out of floodplains and creating larger buffers between bushland and urban development,” he says. “Risk-sharing funding strategies should also be considered as a priority, whereby private insurers and government team up to provide sustainable coverage to communities at greatest risk. The New Zealand Earthquake Commission is a good example of government and private insurance risk-sharing, meaning the industry can remain engaged and sustainable in the face of real and ongoing threats.”
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