Rising Sea Levels and Insurance Woes: Australian Properties at Risk
In a sobering revelation by AON and Monash University, nearly half a million Australian properties are now considered at high risk of flooding, rendering them potentially uninsurable. The research indicates that 370,000 homes and 120,000 commercial properties face a 1% annual risk of flooding, translating to a 25% risk over a typical 25-year mortgage period.
Dr. Tom Mortlake, AON’s climate risk advisory lead, emphasized the severity of the situation, comparing the risk to an alarming analogy: “You wouldn’t go on a plane if there was a one-in-four chance of it falling from the sky, right?” This stark comparison underscores the dire circumstances facing property owners in vulnerable zones.
The study, co-authored by Mortlake and Dr. Felicity McCormack of Monash University, points to the accelerating melting of glaciers and ice sheets as major contributors to rising sea levels. “Glaciers and ice sheets combined are likely to overtake every other driver of sea level rise over the coming decades and become the majority contributors to the projected sea level rise by 2100,” they reported.
With the threat of increased storm surges, Dr. McCormack warned of the compounded effects of climate change on coastal regions: “The more carbon dioxide we pump into the atmosphere, the faster we will melt the ice sheets, and the more rapid and higher magnitude the sea level rise,” she said.
This report arrives at a critical juncture, as the world witnesses record-breaking temperatures and heightened climate activities. UN Secretary-General Antonio Guterres, speaking in Samoa ahead of the 53rd Pacific Islands Forum in Tonga, highlighted the disproportionate impact of climate change on the Pacific Islands. Despite contributing a mere 0.02% to global emissions, these regions face the frontline of climate-induced adversities, from severe tropical cyclones to unprecedented ocean heatwaves.
“The climate crisis is the gravest threat facing this country and this region – and, quite possibly, the world,” Guterres stated, urging global leaders, especially from G20 nations like Australia, to intensify efforts in reducing emissions.
The findings from AON and Monash University serve as a crucial wake-up call to policymakers and stakeholders, stressing the need for immediate and cohesive action to mitigate the impacts of climate change on vulnerable communities and to reassess the frameworks around property insurance in light of the escalating risks.
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