The National Insurance Brokers Association has called on Canberra to be more “proactive” in improving the nation’s readiness for worsening natural disasters.

In a pre-budget submission, it says an approach “focused on long-term investments at both community and household levels … will reduce the impact of natural disasters, enhance resilience and alleviate the financial pressures that increase insurance premiums”.

NIBA also calls for establishment of an advisory committee on emerging risks such as artificial intelligence.

CEO Richard Klipin says in the submission: “While insurance provides a vital safety net for Australian communities, it is only one part of the solution.”

The association urges the federal government to expand the five-year Disaster Ready Fund to a 10-year rolling program, indexed to inflation – echoing a call from the Insurance Council of Australia.

“This approach mirrors existing long-term funding mechanisms and aligns with the government’s stated objective for the DRF to serve as an enduring fund,” the submission says.

It says indexing the fund to inflation will ensure the $200 million a year committed to disaster mitigation projects is “maintained in real terms”. Under current arrangements, the $200 million figure would be effectively reduced to $171 million by the end of the funding commitment, it says.

The association has again pushed for a household-level mitigation scheme to encourage homeowners to take steps such as retrofitting properties in cyclone-prone areas.

The proposed scheme would be co-funded by federal and state governments.

“A national household mitigation scheme would empower homeowners to take proactive steps ... without support, this gap in preparedness will exacerbate losses, strain government recovery efforts and drive-up insurance premiums in high-risk areas,” NIBA says.

“Such a program would deliver numerous positive outcomes, including reducing the risks and costs associated with natural disasters, providing a substantial boost to the economy by creating jobs and stimulating investment in the construction and engineering sectors, and enhancing community resilience and self-sufficiency.”