ICA proposes A$30.15b flood defence fund

Last year saw 41 million policies issued for households and businesses.

The Australian general insurance industry last year saw a claims surge, yet, increasing risks and cost pressures are driving up premiums, widening the insurance protection gap, and putting more Australians at financial risk, warned the Insurance Council of Australia (ICA).

Last year saw 41 million policies issued for households and businesses, with claims exceeding $20.2b (A$32b). However,

Key cost drivers include worsening natural disasters, development in high-risk areas, rising asset values, inflation, and supply chain shortages.

In response, the industry is advocating for greater government investment in risk reduction.

The ICA has proposed a $19b (A$30.15b), ten-year Flood Defence Fund to improve flood mitigation infrastructure and protect vulnerable properties.

This builds on existing initiatives like the Disaster Ready Fund, which was established following the ICA’s 2022 call for increased disaster resilience investment.

Following the 2022 floods, which caused nearly $4.0b (A$6.4b) in insured losses, insurers have worked to address delays in claims processing.

The ICA commissioned Deloitte to review insurers’ response and track improvements.

A follow-up report released in early 2025 found progress, including reduced claims resolution times, but noted that further work is needed to enhance customer experience.

The ICA has also accepted 78 recommendations from recent industry reviews, focusing on improving consumer awareness, identifying and supporting vulnerable customers, investing in disaster planning, and collaborating with government agencies on risk mitigation.

($1.00 = A$1.60)