IAG is to hold a risk summit in May to look at insurance affordability through community resilience to natural disasters.

The summit will include speakers from government, the private sector and communities to debate future requirements for prevention, adaptation and insurance reach.

IAG CEO Mike Wilkins says community resilience through mitigation is key to making insurance more affordable following unprecedented pressure on premiums due to natural disasters and rising reinsurance costs.

“This is an important social issue,” he told the Steadfast Convention today. “Insurance policies aren’t just a safety net for businesses and individuals; they are a safety net for the taxpayer.

“So when someone drops out of the safety net or is underinsured, there is a potential economic impact on everyone.” 

IAG has commissioned research by Sapere Research Group and Roy Morgan to look at consumer spending on insurance.

It finds 30% of people surveyed tried to reduce their spending on insurance by either dropping cover completely or increasing their excesses.

The research also reveals when disaster strikes, about one in 10 homeowners had no building insurance and two in five had no contents insurance. They gave cost as the primary reason for not taking cover out. 

The research also calculates that about 700,000 households knowingly underinsure their contents while a further 2.2 million households are generally unsure if they have the right amount of cover.  

Mr Wilkins says these statistics show communities are less resilient to disaster.

“Insurance plays a fundamental role in any recovery or rebuild effort,” he said. “We have well known views on how the affordability issue can be assisted through proper investment in mitigation, sensible planning laws and removal of insurance taxes, but we also recognise we need to be part of a co-ordinated national conversation.”