Unequal Levees and Rising Insurance: Senate Inquiry Unveils the Risks

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

"Levees come in varying standards," emphasized Rhys Whitley, Suncorp's scientific specialist, during Friday's session. "Each levee is designed with a specific flood height in mind. Installing levees generally provides significant community protection and can lead to decreased insurance premiums, but not all levees offer the same level of security."

Dr. Whitley was addressing a query from the Senate select committee, which wanted to understand why some communities haven't seen insurance premium reductions despite levee construction. "Levees can be engineered for different return periods, such as a one-in-20-year or a one-in-100-year flood event," he explained. "If a levee is built to lower standards, it can be overtopped by sufficiently extreme weather events."

"Additionally," Whitley noted, "levee design standards often rely on historical data, which can be sparse and non-continuous across Australia. We cannot solely depend on human observations since weather systems are capable of producing events beyond our historical experience, such as the 2022 east coast floods."

The Senate committee's hearings, which took place in Ballina, NSW, on Thursday and Brisbane on Friday, saw testimony from community representatives and councils who voiced their frustrations about insurers' pricing and response strategies post-disaster. Suncorp and RACQ Insurance were the only insurers to appear before the committee.

When questioned about climate change's effect on premiums, Dr. Whitley commented, “Addressing climate change might cause a minor impact, perhaps smaller than the annual inflation rate, typically under one percent year-on-year. However, it is crucial not to overlook natural climate variability's role."

He further explained that climate change is expected to increase the frequency and severity of extreme weather occurrences. "Predicting the rate of this change is challenging due to natural climate cycles and fluctuations," he said. "It's difficult to attribute specific weather events solely to climate change. Nevertheless, such events offer clear indications of shifting risk profiles, which we must factor in when determining insurance premiums."

This perspective underscores the importance of differentiating between the inherent risks of natural variability and the additional layer of complexity introduced by a changing climate, presenting ongoing challenges for both insurers and communities in adapting and mitigating risks effectively.

Published:Tuesday, 13th Aug 2024
Author: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Australian Life Insurers Achieve Significant Underwriting Gains in Q4 2025

23 Mar 2026: Paige Estritori

The Australian life insurance sector has reported a substantial underwriting gain of $279 million for the December quarter of 2025, a significant improvement from the $36 million recorded in the same period the previous year. This data, released by the Australian Prudential Regulation Authority (APRA), highlights a notable turnaround in the industry's financial performance. - read more

Record Profits for Australian General Insurers in 2024

23 Mar 2026: Paige Estritori

Australia's general insurance industry has reported an unprecedented after-tax profit of $6.1 billion for the year 2024, marking a significant milestone in the sector's financial performance. This figure is three times higher than the five-year average of $2 billion, according to KPMG's General Insurance Insights report. - read more

IAG Achieves 33% Increase in Insurance Profit Amid Lower Claims

23 Mar 2026: Paige Estritori

Insurance Australia Group (IAG), the country's largest insurer, has reported a 33% increase in its full-year insurance profit, reaching A$606 million for the 12 months ending June 2025. This significant growth is attributed to a combination of reduced claims expenses and strategic premium adjustments. - read more

Introducing Backd: Affordable Insurance for Casual and Contract Workers

15 Mar 2026: Paige Estritori

In a significant move to address the insurance needs of Australia's growing casual and contract workforce, TAL has partnered with global insurtech company Cover Genius to launch Backd. This innovative digital-only insurance product aims to provide accessible and affordable life and income protection coverage to workers who have traditionally faced challenges in obtaining such protection. - read more

Zurich's Home Loan Protection: Tailored Insurance for Mortgage Holders

15 Mar 2026: Paige Estritori

Zurich has unveiled its Home Loan Protection (HLP) product, a new insurance offering that combines life and income protection benefits tailored specifically for mortgage holders. This innovative cover automatically adjusts its premiums as the insured's mortgage balance decreases, ensuring that policyholders are only paying for the coverage they need. - read more

Click for more Insurance News