ICA backs Senate's recommendations on climate risk impact on insurance premiums

Insured losses reached $2.19b between 2023 and 2024 due to four extreme weather events.

The Insurance Council of Australia (ICA) has expressed its support for the Senate Select Committee's report on the impact of climate risk on insurance premiums and availability. 

The report underscored the growing insurance protection gap in high-risk areas of Australia, driven by more frequent and severe extreme weather events and continued development in high-risk zones.

The ICA welcomed the committee's recommendations to help lower premiums, reduce emissions, improve community resilience, and provide better protection for Australians facing worsening extreme weather.

Recommendations include increasing investment in the Disaster Ready Fund, ending new developments in high-risk areas, strengthening building codes, and abolishing taxes on insurance premiums.

The ICA noted that the financial burden of extreme weather is rising in real terms, with insured losses reaching $2.19b between 2023 and 2024 from just four significant events.

Australia's general insurers are already addressing climate risk through initiatives like the industry's Climate Change Roadmap, which outlines strategies for significantly reducing emissions across operations, investments, supply chains, and underwriting.

The ICA will review the senate report's recommendations and engage with its members in the coming months.