The Insurance Council of Australia’s federal election platform contains “a big idea to combat a big problem”, calling for more than $30 billion in government cash to tackle floods.

But that bold recommendation is just one of 16 varied calls for action – all designed to address the issue of rapidly rising insurance premiums.

Here we briefly outline each of the ICA recommendations.

1. $30.15 billion flood defence fund. It’s the standout proposal and the one that’s grabbed all the headlines. ICA wants a huge investment in flood mitigation, funded over a decade with costs shared between the federal, NSW, Victorian and Queensland governments. ICA also calls for a dedicated flood defence minister. “Flood risk is both an economic and a social problem that only governments have the resources to solve,” the report says. 
2. Strengthen the Disaster Ready Fund. The DRF – $200 million a year over five years, matched by states and territories – was a major win for the insurance industry. But ICA is keen to stress that it’s a long-term investment that must keep pace with the times. It wants it locked in as a 10-year rolling program, with funding indexed so it doesn’t fall in real terms. 
3. Better data and flood mapping. ICA wants the government to fund improved data standards and better flood mapping to help inform resilience mitigation and put downward pressure on premiums.
4. Improve disaster response and funding arrangements. ICA recommends reform to help Australians get back on their feet faster by standardising natural disaster recovery arrangements.
5. Cyclone-proof northern Australian homes. The report argues for grants to promote cyclone proofing that better protects lives and property.
6. Abolish insurance taxes. How long has the industry been calling for this? The harder it becomes to afford insurance, the more ridiculous these taxes – which can add as much as 40% to the cost of cover – begin to look. “While these are all state taxes, the federal government is ultimately responsible for the health of the tax and transfer system and is able to influence the states through incentives and penalties,” ICA says.
7. Right-size regulation. ICA wants policy settings and regulation that support competition and innovation. “The rapid pace of regulatory reforms over the past decade has strained industry resources and added to cost pressures that are ultimately borne by customers.”
8. Better land use planning. It’s crazy to be building more homes on floodplains – so why are we still doing it? ICA wants the government, through national cabinet, to “urgently finalise the development of a national standard for considering disaster and climate risk in land use planning”.
9. Improve building resilience. In June last year, federal, state and territory building ministers agreed to include climate resilience as a specific objective of the Australian Building Codes Board from this year. “This will give the ABCB a clear mandate to develop future National Construction Code requirements that reduce the impact of natural disasters on housing and other critical community facilities.” ICA wants the next government to continue this work, and commit to three-yearly reviews of the construction code.
10. Improve outcomes for strata communities. ICA wants improvements in transparency of strata fees, and education for strata stakeholders and owners’ corporation members.
11. Expand home ownership with lenders’ mortgage insurance. ICA is concerned about the impact of the government’s Home Guarantee Scheme, which has led to a “significant reduction” in demand for LMI. “The HGS does not protect the banking system to the same extent as LMI and risks distorting the housing market because the risk protection the HGS offers is not effectively priced.” It wants the HGS redesigned and better targeted so it can operate alongside LMI “as it was originally intended”.
12. Enhance cybersecurity. ICA wants the next government to expand access to the Small Business Cyber Resilience Service and improve data sharing with the insurance industry “to improve our shared understanding of the cyber threat environment and improve underwriting abilities”.
13. Lower risk for small businesses and non-profits. The report calls for the government to fund training and education programs to improve risk management and national standards across industries experiencing a higher frequency of personal injury liability claims. This should relieve pressure on premiums.
14. Undertake civil liability reform. ICA calls on the next government to lead a national review of tort law and civil liability arrangements to examine the impact current legislation is having on organisations’ ability to access appropriate insurance.
15. Address motor trades skill shortages. Insurers want an increase in the number of workers in motor repair industries, to improve vehicle repair time frames.
16. Strengthen automotive supply chains. Enhancing domestic automotive supply chain capabilities should reduce repair costs and motor insurance premiums.

Click here to access the ICA’s document.

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