The increasing frequency and severity of weather-related disasters in Australia highlight a need to focus on more long-term resilience measures, according to analysts at re/insurance broker Aon.
Australia recorded one of its most notable years for weather disasters in 2019, which is already the fifth largest insured loss year over the last 20 years.
Aon believes that the recent losses are likely enhanced in part by climate conditions that are more conducive to triggering and sustaining extreme weather events.
And as climate change continues to affect weather phenomena, the trend of extreme weather events could continue to increase and result in greater risk of damage across increasingly urbanised areas.
“Projected changes in weather extremes highlight the need to focus on long-term resilience, not band-aid solutions,” said Peter Cheesman, Head of APAC Analytics at Aon.
“Greater long-term preparedness is critical for those in risk-prone areas at the centre of those discussions,” he added.
Cheesman argued that the long-term impacts of weather events in 2019 “must be considered in policy-shaping in 2020 and beyond,” and said that the government “should focus on improving Australia’s urban environment resilience.”
This could require the government to revisit policies around development, building codes, practices, materials and installation methods to ensure communities are more resilient.
But it could also mean the introduction of more state-backed insurance initiatives, or collaboration with private sector re/insurers to ensure that vulnerable communities have more financial resilience.
Australia experienced numerous major natural catastrophe events in 2019, starting with the record flooding that inundated Townsville in North Queensland in February, resulting in more than 30,000 insurance claims and payouts of more than AU $1.269 billion (US $860 million).
However, possibly the most significant event in recent months is the ongoing bushfire outbreak across the southeast of the country, which has become the costliest Australian bushfire event ever, with insured losses estimated at more than AU $1.65 billion (US $1.11 billion).
The environmental impact of the bushfires has also been staggering, with an estimated 18.6 million hectares (46 million acres) burned and more than one billion animals killed.
It is thought that the fires were exacerbated by an intense multi-year drought and record-setting spring and summer heat.
The 2019 spring and early winter months also marked Australia’s driest in 120 years, meaning the bushfire season began much earlier than usual last year.
Aon further noted that the economic cost of the fires is likely to be compounded by the issue of underinsurance in Australia, particularly when rebuilding older-style properties to comply with the more robust standards of the National Construction Code.