Australian insurers should play a greater role in mitigation funding, similar to their US counterparts, the Productivity Commission has heard.

Griffith University Adjunct Professor Jim McGowan told a hearing in Brisbane such an approach would reduce a growing dependence on the Federal Government to come to the rescue when disasters strike.

“Clearly the insurance companies need to do more around mitigation funding,” he said.

“I think that comes down to that whole question about shared responsibility, which is in the national strategy, and about people actually taking ownership of that.”

Insurers may consider investing in mitigation projects and reducing premiums for customers who have taken their own steps to cut risks.

Professor McGowan says Queensland, the NT and WA stand to lose the most under the commission’s proposal to allocate mitigation funding on a per capita basis.

The commission’s draft report on natural disaster funding proposes $200 million be spent on preventing disasters rather than on post-catastrophe rebuilding efforts.

“Large, more diversified cities and towns can actually recover from these disasters relatively effectively,” Professor McGowan said. “It is smaller communities, which are often based upon tourism and similar natural advantages, that potentially suffer the most.”

Associate Professor Anne Tiernan, also from Griffith University, says a national cost-benefit database is needed to assess returns from mitigation investments.

“Australia lacks comparable data to assess [this]... so we think that’s an important priority for the commission to consider,” she said.