Cyclones have generated claims costs of $23 billion since 1967 and impacts are set to worsen unless action is taken, given that homes are not resilient and risks are expected to rise with climate change, the Insurance Council of Australia (ICA) says.

A report prepared for ICA by James Cook University Cyclone Testing Station in association with Risk Frontiers finds significant changes must be made to the design method and criteria for new houses to avert impacts and losses increasing from an already high base.

Recommendations include that the National Construction Code should consider resilience in new property construction, in addition to life safety, and that federal and state governments support the development and expansion of schemes for existing homes, such as the “now-defunct” North Queensland Household Resilience Program.

“Australia’s modern houses are not resilient to the tropical cyclone hazard of today, and the National Construction Code must consider resilience for all new property construction if we are to keep all of Australia insurable,” ICA CEO Andrew Hall said.

“Implementation of stronger building codes and retrofitting programs, improved land-use planning, and permanent physical mitigation measures, where necessary, will be key to ensuring an insurable Australia.”

Cyclone Tracy, which hit Darwin in 1974 remains Australia’s costliest natural disaster with a $5.5 billion insurance bill, normalised to 2017 values. More recent cyclones to cross the coast in North Queensland, including Yasi, Marcia and Debbie, have cost $3.83 billion.

The National Construction Code is updated every three years, with the next revision due late next year, an ICA spokeswoman told insuranceNEWS.com.au.

Decisions on updates are administered first through the Australian Building Codes Board (ABCB), made up of state and territory government representatives, the Australian Local Government Association and seven industry representatives.

“The ABCB are considering resilience initiatives and programs,” the ICA spokeswoman said. “It’s expected that consideration will take an extended period.” It’s also up to each state and territory whether they adopt National Construction Code amendments.

The ICA’s cyclone report recommendations also include that the building code should be updated to address water ingress issues and a public awareness campaign should promote regular maintenance on important home features.

Data is another focus, with recommendations to invest in more fixed and mobile weather stations and that an Australian Historical Tropical Cyclone Footprint database should be established that represents land wind speeds.

“A nationally consistent asset register could assist in improving data quality regarding housing construction type, wall construction, roof type, year of construction, renovations and retrofitting works,” the report says.

“This information is essential for the owner of the home or future buyers as well as emergency services, insurers and banks.”

The cyclone report is the second in ICA’s Climate Change Impact Series and follows a study released last month on the impact of actions of the sea. A final report on floods will also be released.

RACQ Group Executive Insurance Tracy Green says the latest report is an important resource for the industry and policymakers to help explain the growing risk of cyclones and their impact on Queensland properties to the broader public.

“Australia needs insurance to be sustainable and affordable and this report complements the growing amount of evidence that investment in resilience and future-proofing our assets is long overdue,” she said.

The report is available here.