SYDNEY, Sept 24 (Reuters) - Australia’s banking regulator on Tuesday urged the government to work with insurers towards investing more in disaster mitigation to keep general insurance affordable for citizens in the country’s northern states.
Flood- and cyclone-related damages sustained in the northern Australia in recent years have pushed up premiums paid out by insurance companies to aggrieved clients, driving up costs that trickle down to customers, making insurance coverage more expensive.
The latest push by the Australian Prudential Regulation Authority (APRA) follows its March directive to local lenders and insurers to include climate change as one of the material risks they should manage.
“All levels of government, working with insurers and other stakeholders, can help to protect vulnerable communities by investing in mitigation, such as flood levies and sea walls, risk-mapping and more robust building codes,” APRA said in a statement.
Earlier this year, major flooding threatened thousands of homes in the northern state of Queensland, forcing over 1,100 people to be evacuated. The northern coast of the country was then battered by two separate cyclones soon after.
Though hit by floods, extended droughts and more bushfires, Australian voters in May re-elected the Liberal-led center-right coalition headed by Prime Minister Scott Morrison, who is vocally pro-coal.
In Australia, climate change policy has turned into a bone of political contention as the coal-rich country grapples with its renewable energy targets.
Last week, thousands of school students poured out of their classrooms and into Australian streets, inspired by 16-year-old Swedish activist Greta Thunberg, demanding world leaders at the UN Climate Action Summit to adopt urgent measures to combat global warming. (Reporting By Rushil Dutta in Bengaluru, Editing by Sherry Jacob-Phillips)