Australia’s insurers have welcomed strong themes of resilience, mitigation and disaster planning running throughout the long-awaited final report of the bushfire royal commission.

The Royal Commission into National Natural Disaster Arrangements, established in February in response to an extreme bushfire season, published its completed findings today after the report was tabled in Parliament.

The 80 recommendations from commission chairman Mark Binskin and his colleagues come as the Insurance Council of Australia (ICA) released new figures today after the country’s worst natural disaster season on record. Insurance losses from the 2019-20 natural disaster season now total $5.94 billion from 315,638 claims.

ICA urges the royal commission findings be accepted by party leaders and that government funding be made available for priority mitigation and resilience programs.

ICA CEO Andrew Hall says the report reflects the ICA’s submission to the inquiry and insurer arguments that lasting improvements to hazard exposure in Australia require a systematic approach to disaster risk reduction, with increased mitigation and improved building standards and land-use planning.

“The royal commission’s recommendations provide clear and urgent direction to governments and agencies on how they should work cooperatively to protect Australian communities from natural disasters,” Mr Hall said.

“Without urgent action, hundreds of communities will remain vulnerable to the impact of cyclones, floods, tropical storms and bushfires.”

Government spending on projects to prevent or reduce the impact of natural disasters falls significantly short of the $400 million a year that the Productivity Commission recommended in 2014, Mr Hall said, “let alone the $3.5 billion a year that APRA has estimated will need to be spent”.

“Many communities need help now for the risks they already face, as well as measures to make sure they can withstand the changing risks caused by climate change,” he said.

The ICA applauds the report’s backing of a national resilience-focused body.

Calls from insurers for state taxes and levies on insurance to be removed were also supported by the Commissioners, who said these taxes mask the role of insurance to accurately signal risk. The final report urges states and territories to consider the findings of previous inquiries that had explored the effect taxes have on insurance affordability and coverage.

“More than a dozen recent inquiries have concluded that states should abolish these unfair imposts because they are a key cause of non-insurance and underinsurance,” Mr Hall said.

Suncorp CEO Steve Johnston says the proposal to establish a new national natural disaster resilience and recovery body is a critical step in Australia’s long-term disaster risk reduction.

A number of recommendations aligned with Suncorp’s submission to the inquiry, he says, including funding reforms, a review of the National Construction Code and better arrangements for removal of debris.

“I welcome the strong themes of resilience, mitigation and disaster planning that run throughout the report,” Mr Johnston said.

“We also strongly support calls that all levels of government must consider disaster risk when making land-use planning decisions. This is an issue that needs to be urgently addressed now so Australians building new homes can be safe and can access affordable insurance.”

Proposals supported by ICA include:

• Establishing a national organisation dedicated to championing resilience across Australia to think broadly about all measures and plan and respond accordingly

• A clear role for governments to educate communities and provide accessible information to help them make informed decisions and take appropriate actions to manage disaster risk

• Greater Federal support for state disaster management

• Improvements in the availability and quality of data to help governments and other stakeholders understand and manage natural disaster risk

• Mandatory consideration of natural disaster risk in land-use planning decisions

• Guidance for insurer-recognised retrofitting and mitigation under which insurers would give consumers clear guidance on individual-level natural hazard risk mitigation actions which will be recognised when setting policy premiums.

ICA says the almost $6 billion of losses in the latest natural hazard season consists of $2.32 billion from bushfires in NSW, Victoria, SA and Queensland, $504 million from November hailstorms in south-east Queensland, $1.65 billion from January’s hailstorms in the ACT, Victoria and NSW, $963 million from February east coast storms and flooding and $503 million from Rockhampton hailstorms.

Insurers have closed an average of 85% of household and motor natural disaster claims despite COVID-19 interruptions.

See the full final report here.