The Australian insurance industry’s peak lobby group has urged the Federal Government to address critical gaps in identified hazard data, allowing insurers and public agencies to more effectively track flood and other natural disaster risk across the country.

In its latest policy recommendations paper aimed at the next Federal Government (in the lead-up to the upcoming elected, slated for May this year), The Insurance Council of Australia (ICA) has re-doubled its call for the Government to boost funding for the National Hazard Data Asset.

The Data Asset is currently under development by the Australian Climate Service and National Emergency Management Agency (NEMA’s), with input supplied by the insurance industry. In addition to the funding boost, the ICA has also sought for the dataset to be made publicly available.

Development of the National Hazard Data Asset falls under NEMA’s Hazards Insurance Partnership (HIP) initiative, with the Government committing $22.6 million over four years to the HIP in its 2023 Budget.

According to the ICA, development of a national hazard data asset, with the assistance of the insurance sector, “will help better inform land use planning, building codes and standards, and understanding of current and future hazard risk.”

“Federal Government funding, in partnership with states and territories, alongside prioritising collaboration with industry, will be critical to accelerating this work,” it said.

Whilst emphasising the importance of an “all-hazard approach”, the ICA notes that floods remain Australia’s most costly and rapidly growing extreme weather risk, and therefore demands urgent attention from Government.

Around 298,000 properties in Australia are deemed to be located in severe or extreme flood-prone areas, current ICA data shows. More broadly, an estimated 1.36 million properties are at risk of flooding, with around half of these properties regarded as falling short of the flood resilience measures of modern planning and building standards.

The ICA calculates that the cost of post-flood clean-up and the recovery at around $2.5 billion each year.

Without accurate or available datasets, the Council stresses, “insurers may be unable to offer premiums that accurately reflect the flood risk”.

“To help address this, Federal Government funding is essential to support the update of local government hazard mapping, which can be made publicly available and used in the National Flood Information Database (NFID),” the ICA wrote in its recommendations paper.

“Insurers are swift to respond to catastrophic events, however incomplete and inaccurate information can reduce the effectiveness of the industry’s response.

“More detailed warnings, updated event information and open communication help insurers move resources to the most impacted areas faster, offering the maximum benefit to affected communities.

“Government investment will improve the accuracy, availability, and timeliness of catastrophic event information.”

Among the ICA’s other data- and mapping-related recommendations to Government include:

• The provision of funding to support local government hazard mapping updates, including flood mapping, to provide more certainty for insurers, accuracy for premium pricing, and improve community awareness of risk
• Update, standardise and make natural hazard and climate risk data publicly available, prioritising flood, bushfire, cyclone and coastal erosion
• Invest in a nationally consistent register of buildings that includes important risk and resilience characteristics such construction features to assist the community, emergency services and insurers, prioritising buildings in high-risk areas
• Develop a Flood Mitigation and Coastal Defence Register with a database of existing assets, maintenance programs and future works

Last year, the Australian general insurance sector wrote 41 million policies for households and businesses and incurred more than $32 billion in claims, ICA data showed.