Natural disaster preventive action and risk management could save over $14 billion a year
The Australian Business Roundtable has released a report that argues better risk management and preventative actions could save up to $14.6 billion a year in recovery costs following natural disasters.
The roundtable group was formed in late 2012 following an unprecedented number of floods, storms and bushfires across Australia. Its members are the chief executive officers of Insurance Australia Group, Investa Property Group, Munich Re and Westpac, as well as the Australian Red Cross and Optus.
The Roundtable released a white paper last year estimating that the economic cost of natural disasters would rise to $23 billion a year by 2050 from about $6.3 billion now.
Property insurance costs have already risen dramatically as insurers have reassessed the risks and costs of natural disasters over the past few years. In areas of North Queensland in particular, the costs of insurance have become too high for some property owners to afford.
The claims bill for tropical cyclone Ita in Queensland in April was around $8.4 million, the Insurance Council of Australia estimates. Bushfires in Perth in January cost $15 million and bushfires in NSW in October 2013 cost $183.4 million.
The latest Australian Business Roundtable report, Building an Open Platform for Natural Disaster Resilience Decisions, argues that well-planned investment focused on risk minimisation could save between $12.7 billion and $14.6 billion a year in disaster recovery costs.
It found natural disaster research could be difficult and costly to access and incomplete, which hampered efforts to manage and reduce risks of natural disasters. In some cases research was duplicated or was unsuitable for organisations that would find the information useful.
The report recommends:
- Developing a single point of access to national information on topics such as flood elevation, the location of assets, the resilience of building materials and long-term weather patterns that could be used to protect homes and property nationally from natural disasters.
- Removing restrictive barriers on accessing data and research by standardising research and addressing concerns such as unnecessary restrictive licensing.
- Prioritising investment in helping communities to become resilient to natural disasters, especially in the highest risk areas.