Parts of Australia at risk of becoming uninsurable — “For many years, Australia was considered an offset for the disasters that insurers experience in the northern hemisphere. But over the last seven years, that’s changed completely.”

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1. Jess Davis spoke with Insurance Council of Australia CEO Andrew Hall:

   *The most obvious driver of premiums is the increasing severity and frequency of major disasters fuelled by climate change, with floods and storms the most costly for insurers.*

   *Increasing building and repair costs due to inflation are adding to the bill. And importantly, the cost of reinsurance is also increasing — that’s insurance for insurance companies.*

   *”For many years, Australia was considered an offset for the disasters that insurers experience in the northern hemisphere,” Mr Hall explains. “But over the last seven years, that’s changed completely because every summer we’ve had big events.”*

   *”We’ve seen global reinsurance premiums increase between 20 and 30 per cent, which follows a number of years of losses by reinsurers in markets like Australia and that’s having a flow-through effect.”*

   *A report from the Actuaries Institute last year estimated, one in eight households in Australia were facing home insurance affordability stress, following a 28 per cent increase in home insurance premiums.*

    

   *”We think that governments should be really focused on reducing the flood risk in Australia, particularly to the current housing stock that we’ve built.*

   *”We estimate that there are around about 200,000 homes in Australia that sit in what’s known as a 1-in-20 flood zone, which means they probably facing very high insurance premiums,” Mr Hall says.*

   *Known flood risks are concentrated on the east coast with New South Wales, Queensland, and Victoria most affected.*

   *”Some of the flood studies that we rely on when we’re mapping the flood risk in Australia are as old as 30 or 40 years,” Mr Hall says.*

   *”In many instances, local governments do need the help to be able to do an update flood studies, particularly in areas where we’ve noticed that the rainfall is now higher and that water behaves differently because there’s been a lot of development.”*