Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Australian states told to take out disaster insurance


Australian states have been told that they can no longer rely on Commonwealth aid alone in the event of major natural disasters. The 30 year old natural disaster relief arrangements are to be rewritten following a government agreement yesterday which will state that the amount of relief given to states after a disaster will be contingent on their own insurance arrangements.

The question of disaster relief has become a high profile issue in Australia after the recent Queensland flooding. A $1.8 billion flood levy tax has now been approved for Queensland, but only after agreement that it would be the last and that in future Commonwealth and government relief will only be provided if the states have their own disaster insurance arrangement.

The changes to the law seeks to prevent taxpayers being exposed to paying for disaster relief. Major changes to the disaster relief arrangements will effectively force each state government to obtain their own natural disaster cover for public assets such as government buildings, schools and infrastructure. States will still be eligible for the Commonwealth disaster relief if they can show that they have fully assessed and hedged their own disaster risks.

There will be opportunities  and challenges for the reinsurance industry to help state governments achieve the right mix of disaster risk management and transfer through traditional reinsurance and also capital market risk transfer arrangements. The new agreement could also lead to the creation of a catastrophe facility for Australian states.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.