Australia’s peak insurance industry has intensified calls for the creation of a dedicated multi-billion-dollar Flood Defence Fund to shield communities from escalating flood risks linked to extreme weather patterns.

The Insurance Council of Australia has proposed a long-term investment of approximately 30 billion Australian dollars to be shared between the federal government and the states most exposed to flood threats, particularly Queensland, New South Wales and Victoria.

The proposed fund would prioritise large-scale mitigation infrastructure such as levees, dams and drainage systems, alongside upgrades to existing flood defences.

A significant portion would be directed toward strengthening at-risk homes and businesses, while additional funding would support voluntary buybacks and managed relocation in the most vulnerable areas.

Industry leaders argue that proactive mitigation spending would substantially reduce the long-term economic burden of disaster recovery and ease upward pressure on insurance premiums.

More than one million properties nationwide are considered at risk of significant flooding, according to industry data, with many dwellings built before modern resilience standards were introduced.

Repeated flood disasters in recent years have driven record insurance claims and contributed to premium increases in high-risk regions, raising concerns about affordability and coverage availability.

Insurers maintain that investing in resilience now would deliver lasting economic and social benefits, including greater stability for households and businesses exposed to climate-related hazards.

Federal and state authorities have acknowledged the importance of disaster mitigation and resilience, noting ongoing collaboration with industry stakeholders.

However, no formal commitment has yet been made to establish the proposed national fund.

As climate variability intensifies and inland and coastal flood risks grow, the debate over long-term mitigation funding is expected to feature prominently in national policy discussions, with insurers urging decisive action to future-proof communities and safeguard economic stability.