Australian governments spend 220 times more money on recovery and rebuilding after floods than they do on mitigation, according to IAG CEO Mike Wilkins.

Addressing a Trans-Tasman Business Circle function in Melbourne last week, he said only $27 million has been spent by governments on flood mitigation over the past four years.

“This is the equivalent of sitting by and doing nothing to educate smokers on the risk of smoking and then simply accepting the huge health bill down the track,” he said.

“Clearly it’s an unsustainable allocation of resources, and all levels of government need to invest in flood mitigation.”

Mr Wilkins says the example of Lismore shows what can be achieved by undertaking mitigation work, when a major flood was contained within levees. “It saved $15 million in recovery costs.”

Resuming high-risk land is another solution. He says some residents in the flood-devastated Queensland town of Grantham are being relocated to safer areas, as are residents in red-zoned houses in Christchurch.

Mr Wilkins agrees weather patterns affecting Australia in the past 10 years have been growing in severity, but says IAG remains uncertain about the cause.

“Something is changing, but it’s really difficult to pin it down and say what,” he said. “But we would love it to go back to normal.”