Australia Housing: Insurance Crisis & Falling Property Values 2024
Nearly 300,000 insurance claims filed in the wake of extreme weather events are adding to concerns about the affordability and availability of home insurance across Australia, according to data released by Insurance Australia Group (IAG) on Tuesday.
The claims, tracked through NRMA Insurance’s Wild Weather Tracker, highlight the escalating impact of natural disasters on Australian households and the financial strain on the insurance industry. IAG, the country’s largest general insurance company, reported a significant increase in claims related to storms, floods, and bushfires in recent years.
The rising cost of reinsurance, coupled with more frequent and severe weather events, is driving up premiums, leaving some homeowners unable to afford coverage. A recent report suggests that one in four households could be underinsured by 2050. Banks are also increasingly focused on the potential for climate-related financial risks, particularly as home insurance becomes more difficult to obtain in vulnerable areas.
IAG’s origins trace back to the National Roads and Motorists’ Association (NRMA), established in 1925. The organization initially focused on protecting motorists but quickly expanded to include home insurance. In 2000, NRMA demutualised and was listed on the Australian Securities Exchange (ASX). Two years later, the company rebranded as Insurance Australia Group Limited (IAG).
The company has responded to major disasters, including the 1989 Newcastle earthquake, the 1994 eastern seaboard bushfires, and the 1999 Sydney hailstorm, by reviewing catastrophe modelling and supporting building code reforms. More recently, IAG provided support during the 2019-2020 Black Summer bushfires, processing over 8,200 claims and deploying its helicopter for 410 hours over three months. IAG established a Natural Perils team in 2002 to improve understanding of extreme weather risks.
IAG operates a range of insurance brands including NRMA Insurance, CGU Insurance, SGIO, SGIC, and WFI. NRMA Insurance has deepened partnerships with community organizations like the Australian Red Cross and GIVIT to bolster disaster preparedness and recovery efforts. Since 2024, IAG reports its NRMA Insurance teams have answered more than 1…