Document / Publication
Australian Strategic Policy Institute (ASPI)
Special report, issue 37:
This paper advocates for starting to think strategically about how we can reduce future losses from natural disasters and aid victims in their recovery efforts. It urges asking fundamental questions about how private insurance and government assistance can be better leveraged to help communities recover. It asserts that a new approach to financing the costs of 'natural' disasters and encouraging those living in high-risk areas to be better prepared is needed.
The paper makes nine recommendations to strengthen the role of insurance for Australian disaster resilience including: (i) establishing a regular dialogue between the insurance sector and state and federal governments to allow both sides to look at long-term disaster mitigation and recovery strategies; (ii) encouraging governments and insurers to work to develop programs that enhance financial literacy as a way to reduce disaster losses and cost-effective ways for individuals to be financially rewarded for taking measures to safeguard their properties; (iii) supporting mortgage lenders to require a property to have full insurance coverage against natural hazards and for this to be well enforced; (iv) implementing the Henry Review on tax that specific taxes on insurance products be abolished; (v) embedding mitigation efforts with disaster assistance funding to reduce risk exposure for communities and insurers; (vi) conducting comprehensive landscape assessments to ensure insurance premiums are based on risk and thus send a signal to people to reduce their vulnerability to major disasters; and (vii) urging the Council of Australian Governments (COAG) to commission a study on initiatives to enhance the take-up of insurance cover and examine various schemes to encourage resilience through insurance arrangements.