Skip to main content

Find disaster recovery services and support

First select disaster or event(s)Expand list
Select assistance typeExpand list

Hazards Insurance Partnership

Insurance Affordability

Managed by the National Emergency Management Agency (NEMA), the Hazards Insurance Partnership (HIP) and Strategic Insurance Projects are helping communities be better prepared for disasters.

Natural hazard risk is increasing in many areas of Australia, which is driving up the cost of insurance and creating underinsurance issues. Poor insurance coverage makes it harder for households and communities to fully recover if hit by a natural disaster.

The Government has allocated $24.3 million over five years for initiatives to improve insurance affordability and availability, including Hazards Insurance Partnership, natural hazards research, research to support national mitigation against rising premiums and insurance sector innovation.

This foundational work is required to:

  • identify the most pressing insurance issues in areas with high natural hazard risk;
  • target and test the best policy solutions to reduce risk and insurance costs; and
  • support better consumer outcomes via more affordable insurance and a better understanding of insurance products.
     

These measures build on the Disaster Ready Fund which provides up to $200 million annually to build disaster resilience and migration projects across Australia.

Purpose

Communities are facing rising insurance premiums due to increasing natural hazards risks. The HIP and strategic insurance projects have a series of initiatives that will enable more targeted investment in disaster risk mitigation, with a goal to put downward pressure on insurance premiums. We will be able to better identify the most pressing insurance issues in areas with high natural hazard risk and test the best policy solutions to reduce risk and insurance costs.

This measure seeks to reduce insurance premiums by reducing future disaster recovery costs through:

  • Exploring how Australian Government funding for all housing and infrastructure projects in higher risk areas can embed principles of disaster risk reduction
  • Identifying priority areas for investment to reduce risk from natural hazards
  • Developing options to support risk reduction investment in the 8-10 high flood risk catchment areas identified in the Hazards Insurance Partnership

Plan for Disaster Readiness

Hazards Insurance Partnership (HIP)

Natural hazard risk is increasing in many areas of Australia, which is driving up the cost of insurance and creating underinsurance issues. Poor insurance coverage makes it harder for households and communities to fully recover if hit by a disaster.

This HIP is a single touchpoint between the Australian Government and the insurance industry to engage on issues of disaster risk reduction and hazard insurance. The HIP is being used to progress the five streams of insurance work agreed in the October 2022-23 Budget.

Meeting One - 2 February 2023

The inaugural meeting of the HIP occurred on 2 February 2023 in Brisbane, with attendees from Government and the insurance industry. Members noted how they were pleased to have a formal mechanism between government and industry to discuss unaffordability and coverage of hazards insurance. Members also affirmed the HIP’s vision to reduce risks for communities through targeted mitigation investment, communication of knowledge needed for mitigation and improved industry advice to Government.

A communiqué of the meeting PDF (79.89KB) is now available. The Terms of Reference PDF (56.7KB) that govern the HIP are agreed to by members.

 

Meeting Two - 16 March 2023

The Hazards Insurance Partnership (HIP) met for the second time on 16 March 2023. Members endorsed the Terms of Reference PDF (56.7KB). Membership discussed the policy issues that would benefit from Government and industry collaboration through the HIP and confirmed that the HIP would be informed and consulted on the DRF for future rounds. A communiqué of the meeting PDF (63.21KB) is now available.

Meeting Three - 25 May 2023

The HIP met for the third time on 25 May 2023. Members discussed how Australia’s approach to insuring hazard risks compared to our international counterparts. Members also discussed the Second National Action Plan and how the industry could contribute and provide feedback. Members agreed to commence a project to identify high hazard risk areas and mitigations that can be implemented to reduce risk and have a positive impact on insurance affordability and availability. Members discussed the alignment of this project with work being undertaken by the Australian Climate Service (ACS). A communiqué of the meeting PDF (105KB) is now available.

Meeting Four - 6 September 2023

The HIP met for the fourth time on 6 September 2023. Members noted the one-year anniversary of NEMA’s establishment and progress made through the seven months since the first meeting of the HIP. The Australian Climate Service provided an update on work through the Technical Working Group whilst NEMA provided an update from the Mitigation Working Group. Members discussed engagement with the Australia-New Zealand Emergency Management Committee (ANZEMC) and the National Emergency Management Ministers’ Meeting (NEMMM), to ensure relevant issues can be fed from ANZEMC and NEMMM to the HIP, and vice versa. Members were also consulted on the Independent Review of Commonwealth Disaster Funding and Round Two of the Disaster Ready Fund. A communiqué of the meeting PDF (320KB) is now available.

Meeting Five - 7 December 2023

The HIP met the fifth time on 7 December 2023. Members received updates on the Higher Risk Weather Season and the whole-of-government program of work to address cost of living pressures. The Australian Climate Service (ACS) and the Insurance Council of Australia (ICA) provided an update on the Bundaberg Flood Pilot. Members agreed to progress discussions on the path forward for bilateral data sharing agreements between government and industry. The Australian Prudential Regulation Authority (APRA) and the ICA provided an update on the Climate Vulnerability Assessment. The ICA and Insurers briefed members on the findings from the industry-commissioned report from Deloitte, ‘The new benchmark for catastrophe preparedness in Australia’ PDF (4.53MB). A communique of the meeting PDF (228KB) is now available.

Meeting Six – 23 February 2024

The HIP met for the sixth time on 23 February 2024. The Minister for Emergency Management, Senator the Hon Murray Watt and the Assistant Treasurer and Minister for Finance Services, the Hon Stephen Jones MP attended alongside attendees from Government and the insurance industry. Members noted that the Government’s priority to improve insurance affordability and the importance of collaboration to effectively and sustainably reduce insurance premiums. Members were given updates on the Strategic Insurance Projects: The Treasury provided an update on the review of the standard cover regime and standard definitions, the Australian Climate Service and the Insurance Council of Australia provided an update of the Priority Catchment Mitigation Strategy and Flood Pilot, the Australian Bureau of Statistics provided an update on the progress of the Enduring Data Asset, and NEMA updated members on the community research being undertaken to gain insight on disaster risk awareness and attitudes. Members also discussed the 2024 HIP Work Program. A communique of the meeting PDF (44KB) is available.

Meeting Seven – 21 May 2024

The HIP met for the seventh time on 21 May 2024 virtually. Members noted the outcomes from the Australian Government Budget for 2024-2025 including the creation of the Insurance Affordability and Natural Hazard Risk Reduction Taskforce to be led by the Department of the Prime Minister and Cabinet. Members discussed the opportunities to ensure targeted government and household investments were translated into downwards pressure on household premiums. The Australian Bureau of Statistics, on behalf of the Australian Climate Service, provided an update on their work developing the Enduring Data Asset for insurance policy information. Members also discussed a national flood risk prioritisation approach to identify high priority flood catchment areas. NEMA provided members with a summary of the outcomes from the Community Awareness and Attitudinal Research Project. A communique of the meeting is available PDF (260KB)

Strategic Insurance Projects

Alongside the Department of the Treasury (Treasury), and the Australian Climate Service (in partnership with the Australian Bureau of Statistics and the Bureau of Meteorology) we are delivering a number of strategic insurance projects to further our understanding of disaster insurance issues, and how to address these. These are:

  • Establishing and delivering the HIP;
  • Developing a national private mitigation measure knowledge base;
  • Exploring options for public-private partnerships;
  • Creating an enduring data asset of insurance affordability and underinsurance to inform policy and programs; and
  • Reviewing the standard cover regime and various standard definitions.

Collectively, these projects aim to address core concerns raised by the Government, insurance industry, and the general public surrounding hazard risk and insurance. These are ongoing streams of work, with progress being pursued by Australian Government partners and in collaboration with the insurance industry through the HIP.

We will provide updates on these projects on this page as they develop.

Frequently Asked Questions

Why is this initiative being undertaken?
  • The increasing severity and frequency of disasters across Australia is driving up the cost of insurance.
  • getting more difficult for Australian communities to afford adequate insurance.
  • This is leading to underinsurance, meaning many households afford to effectively rebuild and recover after disasters.
  • The Australian Government wants to ensure that communities are resilient against disasters and are in the best possible position to recover when disaster does occur.
How will these initiatives address the issue?
  • Our insurance work plan will enable better targeted investment in disaster risk mitigation, to put downward pressure on insurance premiums.
  • The program of work will support the National Emergency Management Agency to identify the most pressing insurance issues in areas with high natural hazards risk and test the best policy solutions to reduce risk and insurance costs.
  • The initiative will foster cooperation between the Australian Government and the insurance sector to address insurance issues driven by natural hazards.
  • It will also establish better ways to collect and share information to inform insurance premium decisions.
What will partnership with industry look like?
  • The program has established a forum for cooperation between the Australian Government and the insurance sector by establishing the Hazards Insurance Partnership (HIP), managed by the National Emergency Management Agency, to address insurance issues driven by natural hazards.
  • The HIP provides a single touchpoint between government and insurers to address issues at the intersection of insurance and natural hazard risk.
  • To drive down insurance premiums, the HIP is progressing a series of projects that seek to enable better targeting of activities to address rising natural hazard risk and work with industry on action to reduce premiums.
  • National leadership through NEMA, an ongoing partnership with industry, and sharing of expertise will help to achieve the necessary level of coordination to best allocate resources and responsibility between the public and private sector to solve insurance and natural hazard risk issues.
  • We are also pursuing public-private sector partnerships that reduce risk, by leveraging work already undertaken to identify the risk reduction investments that public and private sector can undertake together. This will seek to enhance the value of public investments in risk reduction through private sector co-investment.
How will data gathering and information sharing be improved?
  • We are working with the Australian Climate Service to create a dataset to better understand insurance affordability and underinsurance, which will inform policy and decision making.
  • We are also creating a national private mitigation measure knowledge base, to enable more informed decisions on investments to reduce risk. This will allow policy makers and/or individuals to better understand the household-level mitigations that will most likely improve their disaster resilience and reduce risk.
What progress is being made on the Hazard Insurance Partnership and Strategic Insurance Projects?
  • The Hazards Insurance Partnership has proved an effective forum for Government to receive input from the insurance sector on a range of policy and program issues.
  • Projects such as data-sharing, the Mitigation Measures Knowledge Base (MMKB) and support of tools such as the Multi-Hazard Resilience Ratings Scheme, and community attitudes work act as enablers, ensuring that Government programs and policies provide tangible outcomes to communities and individuals through improved understanding of risk and validated mitigation activities.
  • A comprehensive attitudinal research project is underway to establish a national baseline understanding of Australian communities’ perceptions and awareness of disaster risk, insurance and preparedness activities. A national education strategy will then be developed based on this work.
  • We are working with James Cook University and University of Queensland to develop a national household Mitigation Measure Knowledge Base (MMKB) by the end of October 2024 that will provide a comprehensive public collection of mitigation actions that households and communities can undertake to reduce their risk, which will align with and support related initiatives such as the Multi-Hazard Resilience Ratings Scheme.
    • The Knowledge Base will be the first public repository of effective mitigation activities, with both private (household) and public-level mitigation options to uplift resilience against a range of hazards (flood, bushfire, and tropical cyclone in the first instance).