Insurance - a statement on research priorities for natural hazards emergency management in Australia

Throughout 2015-2017, emergency service agencies around Australia participated in workshops hosted by the Bushfire and Natural Hazards CRC to consider the major issues in natural hazards emergency management.

This publication on insurance summarises the outcomes of one of these workshops and poses questions as a guide for a national research agenda in natural hazard emergency management.

The Sendai Framework for Disaster Risk Reduction 2015-2030 (Sendai Framework) specifically identifies the importance of the integration of natural hazard risks into financial management and accounting sectors.

Recent experiences of natural disasters and the potential for more frequent and intense weather and other climate events have prompted governments around the world to take action to develop strategies for enhancing the resilience of communities. Natural hazards have always been part of the Australian landscape. However, the rising costs of disasters have instigated policy documents, such as the Productivity Commission’s report on natural disaster funding arrangements and the National Strategy for Disaster Resilience (NSDR), that build on previous work and highlight the importance of mitigation and resilience activities.

The Australian Productivity Commission report is strong in its support of mitigation. It notes that

‘Governments overinvest in post-disaster reconstruction and underinvest in mitigation that would limit the impact of natural disasters in the first place. As such, natural disaster costs have become a growing, unfunded liability for governments.’

Further, the Australian Government formed the North Australian Insurance Premiums Task Force to explore the feasibility of options to address insurance affordability concerns arising from cyclone risk. The Taskforce, which reported in November 2015 , made a number of recommendations, in particular related to benefits of undertaking and recognising mitigation activities.

In 2015 the Global Seminar on Disaster Risk Financing: Towards the Development of Effective Approaches to the Financial Management of Disaster Risks, focused on the need for the development of effective approaches and questions regarding the sustainability of the insurance industry in its current form, the understanding and measurement risk profiles in both the financial and government sectors, and the tools or innovations available to help manage fiscal risks.