The Insurance Council of Australia (ICA) has expressed support for the decision by Commonwealth, state, and territory building ministers to prioritise building resilience in the objectives of the Australian Building Codes Board (ABCB) from 2025.
The directive aims to ensure that the 2028 National Construction Code mandates that new homes be built to better withstand extreme weather conditions.
ICA CEO Andrew Hall reiterated the insurance watchdog’s calls for adopting building resilience as a key objective of the National Construction Code, alongside health, amenity, and safety.
“Our homes should be built to last a lifetime, so they need to be able to withstand intensifying cyclones, more severe bushfires, and worsening flooding,” he said. “Insurance prices risk, and unless we reduce long-term risks through strengthened homes, there will continue to be pressure on premiums. The economic benefits are clear, and stronger homes that are future-proofed against disaster will also enable communities to recover faster after an event.”
Research commissioned by the ICA and conducted by the Centre for International Economics showed that updating the National Construction Code to enhance the resilience of new homes could save about $4 billion annually. This includes estimated reductions of:
Further analysis by the McKell Institute for the ICA in 2022 indicated that the nationwide costs from extreme weather events are projected to grow by 5% each year, potentially reaching $35 billion annually by 2050, adjusted to 2022 dollars.
The ICA also welcomed commitments by the ministers to improve the safety and reliability of building materials.
Currently, about 72% of Australian homes have defects, leading to costs of approximately $2.5 billion annually. Addressing these defects is expected to ease insurance premium pressures over time.
Additionally, the building ministers agreed to introduce a voluntary pathway in the 2025 National Construction Code for commercial buildings to assess their embedded carbon footprint. They also plan to investigate setting a minimum standard for this in the 2028 code, which the ICA supports.
“Insurers welcome [the] announcement by building ministers and congratulate Minister Husic and his state and territory counterparts for their leadership on this important issue,” Hall said. “We look forward to working with governments, industry, and communities to see the 2028 National Construction Code prioritise resilience, improve the safety and reliability of Australia’s buildings, and support the transition of the built environment to net zero.”
The ICA also recently welcomed the New South Wales government’s 2024-25 Budget, which includes significant allocation for disaster resilience efforts such as $525 million for the Resilient Homes Fund and $87.4 million for the Resilient Lands Program.
