The Insurance Council of Australia (ICA) and the Planning Institute of Australia (PIA), representing the insurance sector and urban planning professionals respectively, are calling on governments at all levels to address growing challenges in the housing market by reducing the risks associated with natural disasters.

At the National Industry Roundtable on Land Use Planning and Resilience 2024 in Brisbane, experts from government, finance, real estate and community organizations highlighted the urgent need for coordinated reforms in land use planning.

The meeting stressed the importance of concentrating new construction in low-risk areas to better protect people and property from the increasing dangers of floods, bushfires and cyclones.

Strategic planning is essential to minimize risk. Construction projects in high-risk areas expose more homeowners to the risk of extreme weather conditions, which in turn increases the gap in insurance coverage.

Insurance Council of Australia CEO Andrew Hall said: “Insurance is the protection for people’s most valuable financial asset, their home. More frequent and severe disasters, a growing population and expanding development in high-risk areas are leading to higher risks in our financial system and putting people at risk.

“The ICA has long stressed the importance of using a nationally consistent baseline of current and future extreme weather risk to determine where we build homes in the future, and to identify which existing homes need to be relocated, retrofitted or raised to reduce community exposure. We urgently need to reduce risk where we can and ensure our planning systems are robust and forward-looking to protect our communities and assets.”

In a joint statement, ICA and PIA outlined several key proposals for future land use planning, including banning further development in flood-prone areas, updating building standards to reflect emerging risks, and strategically implementing home buyback programs in regions where risk mitigation is not possible.

Matt Collins, CEO of the Planning Institute of Australia, added: “Good land use planning can help make our communities more resilient to natural disasters, so it is important that planners have the tools they need, such as up-to-date maps and models. PIA strongly supports the need for high-quality strategic plans that clearly identify areas where we cannot manage the risks from threats such as floods and fires, and provide clear guidance on where we simply should not build.

“We don’t just need more resilient homes – we also need to consider the surrounding landscape. The decisions we make about where we live and invest in the future should be based on the best available data and models, and we need governments to invest in these important factors.”