The NSW Government says it will accept the 76 recommendations of the independent NSW Bushfire Inquiry report, none of which address the issue of underinsurance or the ever-increasing Emergency Services Levy (ESL).

The Insurance Council of Australia (ICA) says it welcomes the report, released today, and Recommendation 28 which suggests subsidies should be considered to encourage property owners to reduce their bushfire risk, resulting in reduced premiums. But it says it is disappointed insurance taxes were ignored.

“The Final Report of the NSW Inquiry is a positive step towards helping ensure that communities and emergency services can prepare for, and respond to, the impact of bushfires,” an ICA spokesman told insuranceNEWS.com.au.

“Insurers are encouraged by the detailed focus on planning and mitigation, as suggested in Recommendation 28, and look forward to working with government to explore measures that may be feasible, meaningful and measurable.

“ICA also welcomes recommendations regarding digital twinning for assets constructed in bushfire prone locations. Access to data about buildings in these zones could assist with underwriting, faster rebuilding and help to prevent underinsurance.

“However, ICA is disappointed the Final Report did not address the issue of insurance taxes and levies that cause non-insurance and underinsurance.

“ICA notes the combined impact of the GST, NSW insurance stamp duties and the ESL result in households typically paying more than 50% tax on their policies, with small businesses typically paying more than 70%.”

The inquiry examined the causes, preparation and response to the devastating 2019/20 bushfires. The report’s executive summary says the fires were “some of the worst in the world and in recorded history”.

“The inquiry was not asked to and did not examine bushfire recovery issues,” the summary says.

It adds that climate change “clearly played a role” and that “we should expect fire seasons like 2019/20, or potentially worse, to happen again”.

“The NSW Inquiry thinks that it is inevitable that there will be future property losses, given the settlement patterns in NSW and legacy development issues,” the report says.

“We need to grab what is becoming possible in terms of unmanned aircraft and vehicles, and think big about what will make firefighting, and living in the community with fire, safer.”

Other recommendations include establishing a national bushfire database and setting up NSW as a world centre of bushfire research.

“ICA will thoroughly review these recommendations and work with member companies to discuss how these recommendations can assist insurers in continuing to provide affordable and accessible products to bushfire-prone communities,” ICA Head of Risk and Operations Karl Sullivan said.

Click here to read the report.