Australian insurer Insurance Australia Group Limited (IAG) has partnered with the US National Center for Atmospheric Research (NCAR) to map the potential for extreme weather related risks in Australia under different levels of average temperature rise. The report is called Severe Weather in a Changing Climate.
The risks identified include:
- increased severity of tropical cyclones reaching landfall,
- increased flash rainfall,
- increased risks of flooding, hail, and water ingress,
- sea level rise, and
- increased bush fire risks.
As the report notes, it is likely some of these impacts will arise even if significant efforts are made to reduce future carbon emissions, due to the existing greenhouse gases already in the atmosphere.
Mapping these risks points to different ways in which governments, businesses, and communities must plan for future infrastructure needs. Both existing and planned public and private infrastructure projects will need to be designed or retrofitted to be resilient to extreme weather.
Insurers will need to account for climate change when considering the potential for future claims for property damage and business interruption. Conversely, regulators must also grapple with the potential that some insurances will become too expensive, or no longer provided, for consumers in areas highly exposed to climate related impacts.
Properly planning for these risks will be critical into the future, as a failure to adapt or mitigate such risks may sound in potential liability to third parties or shareholders.
Climate change is already well underway and is considered by many to be the greatest risk currently facing humanity. Every year we are confronted globally with extreme weather events, that become natural disasters. Our communities in Australia are exposed to just about every hazard this world can throw at them, from earthquakes to storms and cyclones, to bushfires and devastating floods. We cannot prevent these events happening, but we know more can be done to better prepare communities and make them more resilient and stronger. Protecting communities requires greater investment in resilience and mitigation planning – be it from governments, businesses, community organisations or individuals – which will reduce the physical, economic and social recovery costs that follow a disaster.
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