As property owners, councils and insurance firms start assessing the impacts of the North Queensland floods, University of the Sunshine Coast business experts warn of flow-on financial effects across the state.
The Insurance Council of Australia this week activated its preliminary catastrophe processes.
"Insurers are likely to reassess risk models, increasing premiums for flood-prone areas and potentially extending adjustments to historically lower-risk regions including areas within the Sunshine Coast," said UniSC Professor of Finance Sajid Anwar.
"This trend follows global shifts as insurers recalibrate climate-driven risks.
'Mitigation strategies at both individual and policy levels are crucial. Households can reduce risk and long-term costs through measures such as adopting higher policy excesses and retrofitting properties with flood-resistant materials' - Professor Anwar
"Governments must invest in large-scale flood mitigation infrastructure, improve drainage systems, and incorporate climate adaptation into urban planning."
Professor Anwar said overall economic impacts would extend beyond affected areas to regional supply chains, requiring multi-year recovery efforts.
"Climate-related disasters continue to impose escalating financial burdens, particularly on communities with limited adaptive capacity," he said.
Professor of Management Studies Mark Loon, who is attending a conference in the United States where Californians face the economic aftermath of deadly wildfires, called for a collective approach to alleviate the knock-on effects of natural disasters into the future.
'Insurance firms are using more sophisticated technology and data at a greater pace to not only model risks, but also how interventions made by policy holders can mitigate risks' -Professor Loon
"The aim is to avoid insurance holders being priced out, like some property owners were in the Palisades.
"A key player in this fast-changing landscape of more frequent and higher impact natural disasters are public services such as councils and emergency services.
"By working more closely with local councils, property owners and insurance firms can better develop collective mitigating actions to ensure insurance premiums do not escalate."
Senior Lecturer in Finance and Economics Dr Hammad Siddiqi said the Australian insurance market would be struggling because of the global market.
"The way the insurance market works is that almost all insurance companies in the world relay on essentially the same market (called re-insurance market) to raise funds," Dr Siddiqi said.
"Given the disastrous fires in California, the re-insurance market has come under a lot of pressure.
'This means that insurance companies in Australia will be struggling to raise funds from the re-insurance market in the foreseeable future, so premiums will go up and coverage will go down' - Dr Siddiqi
He urged people looking for insurance cover to consider all options and mitigation strategies.
