Suncorp says its own research supports the findings of the Productivity Commission’s draft report on natural disaster funding.

The commission recommends greater government investment in mitigation and a shift away from relief and recovery to reduce the cost of disasters.

Suncorp commissioned consulting group Urbis to conduct a cost-benefit analysis of mitigation projects involving flood levees.

It shows two such projects in Queensland – Roma and St George – will bring economic benefits worth “at least” five times their cost.

Suncorp Personal Insurance EGM Customer Product & Pricing Lisa Harrison says it is already understood that flood mitigation protects vulnerable communities and economies and reduces the cost of insurance.

However, the analysis underpins the benefits of investing in long-term mitigation infrastructure, she says.

“These new figures show [that] if properly done in the right place, it’s one of the smartest investments governments can make.”

With capital and running costs of $5.9 million, St George’s flood mitigation project will deliver “protective benefits” of $31.6 million over 50 years, for a benefit-cost ratio of 5:4, the analysis shows.

Roma’s project cost is $16.4 million, delivering protective benefits of $81.1 million over the same period. That is a benefit-cost ratio of 9:4.

Ms Harrison says the report complements the Productivity Commission findings.

As previously reported in insuranceNEWS.com.au, the commission’s report has caused concern among councils that extra responsibilities for mitigation infrastructure will impose an “intolerable financial burden”.

Local Government Association of Queensland spokesman Craig Johnstone says combined insurance premiums for councils in the state’s north would be in the “hundreds of millions” to cover flood, cyclone and storm damage “given their frequency and ferocity”.

Ms Harrison says “councils can’t do it all themselves”.

“Local government must be given more support to protect their communities,” she said. “They need the funding to make it worthwhile and many councils struggle to access the expertise to plan the solutions that work best for them.”

She says many communities could be better protected and pay lower premiums “with the right funding and government policies”.

Suncorp says Roma residents protected by the town’s new levee have enjoyed insurance cost reductions of up to 90% – an annual saving of up to $7000.