Governments and insurers worldwide are building shared risk pools, but they only work if they reduce underlying threats, according to Insurance Council of Australia climate, social policy and engagement GM Alix Pearce. 

After discussions with government, industry and other stakeholders in 11 cities across six countries, Ms Pearce has published a report – Insurance Australia Tomorrow: Pathways to Protecting Communities in a New Era of Risk – that launched at the ICA conference last week. 

Ms Pearce will soon meet with the National Emergency Management Agency and is in talks with Financial Services Minister Daniel Mulino’s office about a partnership to implement the report’s recommendations. 

She told insuranceNEWS.com.au it is widely recognised that change is needed to protect the most vulnerable people from underlying risk. 

“This is a global challenge, but we require Australian solutions,” she said. 

Ms Pearce says studying 25 risk pools around the world showed they work if they reduce risk, are backed by resilience measures and enforceable land use planning, and rely on robust hazard data. 

She outlined her research in the August/September edition of Insurance News magazine. 

Ms Pearce received a scholarship from the Winston Churchill Trust to visit the US, Singapore and Europe to research how Australian insurers can derisk and scale climate and resilience solutions. 

Download her report here.