Insurers urge Australia to launch $21B flood defense fund

(Bloomberg) --Insurers in Australia are urging legislators to set up a A$30 billion ($21.4 billion) flood defense fund as the nation grapples with surging costs from extreme weather events.

Funding would be used on tasks including the addition of more flood-protection infrastructure like dams or levees, and also for a A$10 billion property buyback program targeting the estimated 10,000 dwellings in areas where it isn't possible to mitigate flood risks, the Insurance Council of Australia said Sunday in a statement.

Prime Minister Anthony Albanese's government has options "to alleviate premium pressure for the highest risk households in the short-term, while making longer-term investments in large scale infrastructure and risk mitigation projects," Andrew Hall, the council's executive director, said in the statement.

Insured losses from natural catastrophes globally reached $107 billion last year, according to reinsurer Swiss Re AG. Rising premiums are driving some households to drop coverage, while insurers are also withdrawing service entirely from some high-risk areas.

From 2019 to 2024, insured losses to extreme weather events averaged $4.5 billion a year in Australia, roughly two-thirds higher than in the previous five-year period, according to the council's statement.