Climate change report warns of the perfect storm for the economy and affordability of insurance.

I am set to read through the climate change report but the headline that continuing to ignore it has the potential to cost Australia $3 trillion is a wakeup call that we should not ignore.

The question is – is this increased risk insurable at an affordable level?  One of our team sent through photos of the hail that hit her home in Brisbane and she was only at the fringe of the storm. My home along with the homes and cars of my son and daughter were hit by similar sized hail in January in Melbourne. Before this latest storm the insurance industry had paid out over $4.5 billion in natural catastrophes. This covers claims from bushfires, storms, hail storms and floods.

This latest super intense storm comes at a time where insurers have recorded the lowest profitability in the last 20 years. (Source Finity’s annual state-of-the-industry Optima report, 29 October 2020.)

Whether you have the most basic understanding of economics or risk management you should know what is going to happen if we fail to manage the increasing risk of climate change. This is not just reducing carbon emissions but stopping people building in flood zones; areas prone to erosion and storm surge; allowing, no insisting on fire breaks between property and bush land, managing water runoff and the like.

Meanwhile Governments continue to exacerbate the increasing cost of insurance with levies and taxes that drive up the cost of insurance at a time when so many can not afford insurance, if they can get it.

We have seen the crisis of affordability of insurance in Northern Australia for years. I am getting more and more calls from home and business owners in bush fire areas that they cannot get insurance let alone afford it.

The same for an increasing number of occupations although this is more the industries failure to manage their processing risk rather than climate change.

Like so many people, young and old, I question what legacy we are going to leave for our grandchildren/younger generation.

We need some real leadership at all levels of government, business owners and individuals to tackle this very real problem.