Nearly 9 in 10 Australian insurers commit to net-zero targets by 2050

Extreme weather events cost homeowners approximately $4b annually.

Nearly nine in ten insurers have committed to net-zero targets by 2050, with 50% aiming to achieve operational net-zero by 2030, the Insurance Council of Australia (ICA) found. 

In its 2024 edition of the Climate Change Roadmap, the ICA outlined the steps taken by the insurance industry to prepare for mandatory climate disclosure requirements, which will take effect for most major Australian firms in early 2025. More than half of the surveyed insurers have already faced similar obligations in other jurisdictions, the ICA noted.

The report also highlighted insurers’ strategies, such as incentivising sustainable home renovations and promoting bushfire resilience. These initiatives aim to help insurers achieve their emission reduction goals whilst also mitigating risks and moderating premium costs for customers.

Over the past year, the ICA has enhanced its support for industry members by organising a national roundtable on land use planning and resilience and developing best practice guides on emissions target-setting, transition planning, and nature-positive insurance. 

Additionally, the ICA has broadened its focus on global best practices, including leading an international delegation to the US comprising insurers, government officials, and policymakers to study responses to extreme weather challenges.

"The insurance industry acts as the financial shock absorber for the growing impacts of extreme weather events, which are projected to cost Australia $35.2b annually by 2050," said Andrew Hall, CEO of the ICA.

Extreme weather events cost Australian homeowners approximately $4b annually, underscoring the need for greater resilience-building measures to address escalating threats such as bushfires, cyclones, and floods, Hall added.