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Hazards Insurance Partnership

Helping to address rising insurance premiums

Led by the National Emergency Management Agency, the Hazards Insurance Partnership 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 is allocating $22.6 million over four years for a program of work to better target mitigation investment to help improve insurance affordability over time.

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 Hazards Insurance Partnership (HIP) and strategic insurance projects will enable more targeted investment in disaster risk mitigation, 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.

Plan for Disaster Readiness

Hazards Insurance Partnership (HIP) and strategic insurance projects

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.

 

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.
  • It’s getting more difficult for Australian communities to afford adequate insurance.
  • This is leading to underinsurance, meaning many households can’t 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 this initiative address the issues?
  • The Hazards Insurance Partnership (HIP) and strategic insurance projects is an initiative that 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 (NEMA) 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 partnering with industry look like?
  • The program of work will create a forum for cooperation between the Australian Government and the insurance sector by establishing the Hazard Insurance Partnership (HIP), led by the National Emergency Management Agency (NEMA), to address insurance issues driven by natural hazards.
  • The HIP aims to provide 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 will 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.
  • NEMA will also pursue 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?
  • The National Emergency Management Agency (NEMA) will work with the Australian Climate Service to create a dataset to better understand insurance affordability and underinsurance, which will inform policy and decision making.
  • NEMA will create a national private mitigation measure knowledge base, enabling more informed decisions on investments to reduce risk.