Insurers, communities and policymakers will be “flying blind” without greater climate data and modelling, particularly at a granular level, experts warn.

Policymakers are under pressure to promote economic growth and sufficient housing stock while addressing climate change causes and driving adaptation in exposed communities, they say in an article published by Sparke Helmore Lawyers.

“Decisions are being made under high uncertainty and without the benefit of precise insights and further investment in production of data sets and modelling to guide them.”

The article was co-written by Sparke Helmore partner Simon Lewis and Alexander Pui, an adjunct fellow at the University of NSW Climate Change Research Centre and Marsh’s VP of climate and sustainability advisory.

Before risk can be managed it must be properly assessed, but modelling of climate threats is an emerging area, they say.

The Hazards Insurance Partnership, bringing together the government and the insurance industry, is a positive development, they note. The group’s work includes co-operation on exchanging data and developing centralised assets.

The article says work is under way to improve insurance affordability in exposed areas. A report from the federal government’s affordability and natural hazards risk taskforce and this year’s review of the cyclone pool legislation are expected to be key events.

“Managing and reducing property exposures in existing high-hazard zones will be challenging, but at the very least steps should be taken to prevent further new development into high-hazard zones,” the article says.

Banks could work with insurers on resilient infrastructure financing to ensure sustainability and affordability of cover, which would bring benefits for communities, banks and businesses.

For regions where adaptation measures are too costly, managed retreat should be considered, the article says. It notes the Insurance Council of Australia has put forward a policy proposal on this ahead of the federal election.

The article is available here.