Nearly 229,500 properties in Australia are exposed to a 1-in-20-year flood risk, according to new data analysis released by the Insurance Council of Australia (ICA).
This data is part of a submission by the ICA to the country’s parliament’s house of representatives standing committee on economics’ inquiring into insurers’ responses to 2022 major floods claims in the country.
ICA’s analysis shows that 229,455 properties have a 5% flood annual exceedance probability (AEP), commonly known as a 1-in-20-year flood risk. More than half of these properties are in New South Wales, with the bulk of the remainder in Queensland and Victoria.
Data from the National Flood Information Database included in the submission shows that New South Wales, Queensland and Victoria have 78.1% of all properties nationally. Despite flood events accounting for more than 54% of losses from declared insurance events in the last five years, only 4.4% of properties nationally are exposed to 1%, 2%, or 5% AEP.
The ICA’s submission highlights the need for urgent action to address the protection gap – the difference between the cost of recovering from extreme weather events in Australia and the insurance in place to cover those events.
The submission notes that last year was a record year for flood losses in Australia, with in excess of 300,000 flood claims.
ICA data analysis also shows that damage from flood is wildly disproportionate to the number of properties known to be exposed to flood risk, so by targeting mitigation efforts to those most affected the burden on all can be relieved to a large extent.
ICA also suggested that to better protect lives and property and stabilise insurance premiums, there needs to be greater investment by governments at all levels in measures that increase protection of homes and communities from the impacts of extreme weather events.
It said, “Governments must also amend land use planning legislation to include a mandatory requirement for planning approvals to consider property and community resilience to extreme weather and improve building codes so future homes are made more resilient.”