By Peter Hannam, Carbon economy editor
8 January 2013
(Sydney Morning Herald) – Australia's exposure to natural risks is on the increase and governments at all levels should step up joint efforts to limit the losses and prevent insurance costs from spiralling higher, one of the country's biggest insurers says.
Modest investments in flood or fire mitigation measures can significantly reduce the cost of the disasters when they inevitably occur, Suncorp Group said in its Risky Business report on risk management.
“More frequent extreme weather events, economic growth, urbanisation and population shifts towards high-risk areas have all combined to dramatically increase Australia's risk exposure,” Suncorp said in the report. “The chance that natural hazard will become natural disaster is greater than ever.”
The report's public release coincides with one of the biggest days of fire risk in Australia since the Black Saturday bushfires in Victoria almost four years ago. Sydney on Tuesday will feel its first blast of the massive heatwave that has been frying much of the continent for almost a week.
NSW Premier Barry O'Farrell said that Tuesday "will be perhaps the worst fire danger day the state has ever faced".
The Suncorp report said governments could assist with fire-risk reduction through fuel-load management, prescribed burning and fire breaks. Households, though, had a perhaps bigger role to play by installing fire defence systems and clearing vegetation such as tall trees close to their homes.
It cited findings of the Special Inquiry into the 2011 Perth Hills Bushfire, which heard evidence that evaporative air conditioners were particularly prone to an ember attack unless retrofitted with screens costing less than $500.
Suncorp last year stirred public anger in parts of Queensland for deciding to “red-line” or halt sales of new insurance policies in the outback towns of Roma and Emerald because of repeated flooding events.
While the current bushfires in several states are resulting in localised, temporary embargoes on new insurance sales – a policy typically imposed by Suncorp, IAG and other insurers as a fire or other disaster event looms – the company has no plans to extend “red-lining” to fire-prone regions.
“Floods are a bit more predictable than a bushfire,” said Chris Newlan, Suncorp's head of public policy and corporate affairs. A flood is “caused by a natural event that can be mapped over time. A bushfire can be started by a couple of 16-year-olds on school holidays,” he said. [more]
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