The Insurance Council of Australia (ICA) has welcomed new legislation from the NSW Government to establish emission reduction targets but says “more needs to be done” to address future weather risks.  

As part of the legislation, the NSW Government will establish an independent Net Zero commission to monitor, report and review the state’s progress towards emission targets. The legislation targets a 50% reduction in greenhouse gas emissions by 2030 and net zero by 2050.  

In a submission, ICA CEO Andrew Hall praised the Government’s efforts but says further commitments, such as science-based targets to limit global warming to below 2°C, are needed.  

“Legislated targets will offer NSW businesses and industries a stable and predictable investment environment which enables businesses and investors to make long- term plans and allocate capital towards green and climate-friendly initiatives,” Mr Hall said.  

“The Paris Agreement calls for holding the increase in temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C. 

“These targets need to be supported by a comprehensive set of policies that accelerate NSW’s transition to net-zero, and the Insurance Council and its members look forward to continuing to collaborate on the NSW Government’s energy and climate policies.”  

Mr Hall says Australia, where the mean temperature has already risen by 1.46°C, is “on the frontline of climate change impacts” with worsening natural disasters expected to continue to increase insured losses for Australians.   

He notes that insurers have paid out more than $16.8 billion in extreme weather claims since the 2019-20 Black Summer bushfires, and current projections expect annual insured losses to trend upwards of $35.24 billion per year by 2050.  

“These enormous losses will only continue to climb if climate change expands high-hazard zones around the country and development continues unabated in high-risk areas,” Mr Hall said.  

“Insurance Council analysis has found that when extreme weather events strike large population centres in the future, the impacts and costs will be much greater. 

“For example, the Sydney Hailstorm, which caused $1.7 billion in insured losses back in April 1999, would have resulted in an estimated $8.85 billion in insured losses if it happened today.”  

ICA has set out a “suite” of policy recommendations for the NSW Government, including resilience investments, land use planning, strengthening construction code standards, and improving compliance with noted standards.  

“The responsibility to make these changes falls to governments, both state and federally,” Mr Hall said.  

“While there have already been welcome announcements such as the Federal Government’s $1 billion Disaster Ready Fund and state-funded resilience programs being rolled out across high-risk regions in Queensland and NSW, more needs to be done.”