Suncorp CEO Steve Johnston has called for a national focus on resilience and mitigation strategies to manage the escalating impacts of natural disasters in Australia.
Writing in The Australian, Johnston (pictured) reflected on his visit to Balmoral Village in the aftermath of the 2019 Black Summer bushfires, describing how the devastation reinforced the need for systemic change.
Johnston outlined the significant societal and financial costs of disasters, emphasising that while physical assets can be repaired, the broader human impact often endures.
“The tragic reality and far-reaching impacts of extreme weather was evident in every conversation I had that day, whether it was with customers or people who didn’t have insurance at all. Sure, one way or another, physical assets can be restored, but the lives of those who live through such horrific events will never be the same,” he said.
He argued that government spending has been disproportionately skewed toward disaster response and recovery, with limited investment in prevention. Although the proportion allocated to mitigation has increased from 3% to about 10%, Johnston maintained that this remains insufficient.
In his commentary, Johnston highlighted Suncorp’s advocacy for a four-part strategy to enhance disaster preparedness. The plan includes:
Johnston stressed that improving resilience is the most effective way to address both risk and affordability concerns in insurance.
“The issue of affordability is far more vexing. The direct cost of much of a home insurance premium reflects the price of reinsurance, which is the insurance a company like Suncorp purchases to protect itself from significant events and the aggregation of smaller and mid-sized events,” he said.
He noted that reinsurance costs have risen sharply, driven by global reassessments of risks tied to secondary perils such as bushfires and floods. Suncorp’s natural hazard costs have grown by over $1 billion in the past five years.
Johnston argued that while insurers must address customer service and claims processes, broader industry challenges require a collaborative approach.
He pointed to the importance of balancing disaster recovery spending with forward-looking investments in mitigation, suggesting a goal of equal spending on prevention and response.
Despite the scale of the challenge, Johnston pointed to reasons for optimism, including a range of resilience projects awaiting funding and a consensus among governments, insurers, banks, and other stakeholders on the need for collective action.
He urged policymakers to seize the opportunity to prioritise resilience during the upcoming Federal election campaign.
“It’s time for us all to seize the moment, and the forthcoming election campaign is a good place to start,” he said.
