NSW today released its State Disaster Mitigation Plan, setting out actions to strengthen resilience against natural catastrophes.

The plan was developed by the NSW Reconstruction Authority, which was created following the 2022 Independent Flood Inquiry, and it lists a review of levy arrangements on premiums and working with insurers on land use planning among 37 areas of focus.

“We’re shifting the dial in how we address disasters, as well as making sure we do not inadvertently put people in harm’s way through bad planning decisions,” Minister for Emergency Services Jihad Dib said. “For the first time, NSW finally has a plan to begin turning that around with information on how we can invest in reducing risks before disasters occur, to better protect communities.”

The Insurance Council of Australia (ICA) has welcomed the plan, saying in a LinkedIn post it is an “important” milestone in better protecting the state and aligns with ICA’s long-term advocacy for investment in disaster mitigation and resilience.

An ICA spokesperson told insuranceNEWS.com.au today: “It is addressing extreme weather risk through investment in mitigation infrastructure, early warning systems and stronger building codes that will help build community resilience to extreme weather and stabilise insurance prices.

“The NSW [Government] has made good progress in this space recently, including announcing its commitment to reform the emergency services levy and taking action to prevent the construction of new housing developments in some areas at high risk of flooding in the Hawkesbury-Nepean Valley west of Sydney.

“ICA encourages the NSW Government to continue to take the lead through prioritising development in areas of low risk to extreme weather and increasing investment in mitigation infrastructure.”

According to the State Disaster Mitigation Plan, NSW Treasury expects to deliver its review of levy arrangements on insurance premiums by the end the year. But levy reforms alone are not enough to address the challenges of insurance affordability, especially in disaster-prone areas.

“While insurance affordability can be improved by removing levies (and a review of these arrangements has been announced) insurance may continue to be unaffordable in areas of high risk,” the plan says. “As a result, disaster adaptation planning should reflect insurance affordability and identify actions to reduce risk where insurance is unaffordable.

“This is because a lack of affordable insurance may be a factor in deciding what risks are tolerable, and where action and investment is required to reduce that risk.”

The plan says it is important the NSW Government continues to work with the insurance sector to support increasing insurance affordability.

The plan says insurance is not universally available for all hazards, such as coastal risks, and where it is available, recent research shows disaster insurance affordability is decreasing, with 12% of households experiencing insurance affordability stress.

Click here for more from the plan.