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: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

Why Claim Clarity Matters More Than Ever for Income Insurance

13 Aug 2026: Paige Estritori

Recent complaints reporting from Australia's financial dispute resolution system has put a practical issue back in front of workers: the value of income insurance is not only in the monthly benefit promised, but in how clearly a policy works when a claim is made. - read more

What Genetic Testing Reform Could Mean for Income Protection Applicants

05 Aug 2026: Paige Estritori

Australia’s move to restrict the use of adverse genetic test results in life insurance underwriting is an important development for people who have been hesitant to explore personal cover. While the reform is usually discussed in relation to life insurance, it also matters for income insurance because many retail policies sit within the broader life insurance framework. - read more

What a More Stable Income Protection Market Means for Your Pay Packet

29 Jul 2026: Paige Estritori

Recent APRA life insurance performance data has given the income protection sector a cautiously positive signal: the market appears to be moving through a more stable phase after several years of product redesign, pricing pressure and closer regulatory attention. For consumers, the important point is not that cover has suddenly become simple, but that insurer sustainability and claim reliability remain central to the value of any policy. - read more

Why the Simple Advice Push Matters for Your Cover

22 Jul 2026: Paige Estritori

Australia’s life insurance sector has renewed its push for consumers to receive simpler help with the cover they already hold, particularly through superannuation. The Council of Australian Life Insurers has again argued that many people need clearer, more accessible guidance about insurance inside super, including death, disability and, where available, income protection insurance. - read more

Chronic Illness Risk Puts Fresh Focus on Income Insurance

15 Jul 2026: Paige Estritori

New research highlighted by Zurich has put a timely spotlight on a major challenge for Australian workers: people are living longer, but many are also spending more of those years managing chronic health conditions. For households that rely on a regular wage, salary, business income or contract work, this trend reinforces why income insurance is not just a product for sudden accidents. - read more

Click for more Insurance News