Insurance News magazine June/July 2026
A co-ordinated action plan aims to rate and revamp older homes, raising resilience to climate risks
By Jan McCallum
A national plan to improve the resilience of high-risk homes aims to achieve results within a year while establishing a framework for longer-term improvements in the nation’s disaster mitigation.
The Housing Resilience Action Plan builds on previous programs to get the ball rolling on a problem that is only getting worse.
A central plank of the plan is development of a national risk and resilience rating system (NRRRS) that provides standardised ratings supporting upgrades to “legacy homes” – older properties built to standards that did not account for future climate risk or resilience needs. Insurers, lenders and the property industry could use this information to price products.
Proposals for the first year include that the federal government fund a voluntary rollout of the NRRRS, and that insurers commit to including the ratings in premium settings and providing better information to consumers on price drivers.
The plan, developed following a meeting of stakeholders last year, proposes the government convene a forum in the next six months to form a national housing resilience accord.
This will align priorities and accelerate progress, but while the wheels of bureaucracy turn, industry and consumer groups will already be working on proposals set out in the action plan, to keep the strategy moving.
Such a co-ordinated response is becoming more pressing as financial stresses and growing climate risks increase the likelihood of consumers going without insurance and suffering losses. Co-operation among all stakeholders is central to the plan’s success, and access to better information is also essential according to an action plan paper subtitled Tackling Legacy Issues: Resilient Homes for Affordable Insurance.
“Consumers in legacy homes need to understand their property’s climate risk, receive trusted advice, access funding for resilience upgrades and see insurance costs reduce as risk is lowered,” the paper says.
Households need access to independent, place-based and trusted advice services. The rating system will allow access to information homeowners can use to upgrade their properties, but this alone will not deliver better outcomes, the document warns.
“If not accompanied by co-ordinated action, it can expose households to new risks without providing viable pathways to respond.”
The plan labels legacy housing a system problem, not a failure of individual households.
An effective response must be co-ordinated across governments, markets and households, should be financially and socially sustainable rather than dependent on repeated crisis intervention, and must be fair, particularly for vulnerable households.
Actuarial consultant Finity, the Financial Rights Legal Centre, Financial Counselling Victoria, ARC Justice, Monash University and the Resilient Building Council worked on the strategy. It is the result of a workshop held in December that gathered 50 leaders from government, insurance, banking, investment, academia and the community sector to explore responses to legacy housing issues.
The plan contains 50 recommendations that may seem sweeping and transformative, but it notes “piecemeal reform without a collaborative vision will fail”.
Alongside the government-funded voluntary rollout of the NRRRS in the first year, the plan calls for experts, governments, industry and consumer groups to agree on an interim methodology for standardised property-level risk data.
Year-one steps for the insurance industry include working with banks to fund training and resourcing for consumer advice providers, so they can help people make decisions around resilient building options.
The government and investors should agree to include the NRRRS and resilience lending within the green taxonomy, enabling adaptation to become a recognised investment category capable of attracting large-scale private capital.
The action plan aims to build on mechanisms that are already working, such as home energy ratings, credit reporting frameworks and financial systems that can be applied to problems of climate risk and insurance affordability.
The Resilient Building Council has developed the underlying methodology and insurance pricing integration for resilience ratings, and insurers are already pricing the ratings, demonstrating resilience can be reflected in premiums where risk reduction is measurable, nationally consistent and verified.
The council’s Resilience Ratings system will provide the operational foundation for the NRRRS, enabling rapid national scale-up and supporting the development of market-based solutions.
Scaling the system will require integration with national risk data and broader market infrastructure, but the financial sector can use the ratings immediately to develop insurance pricing, lending products and risk assessment tools “without waiting for perfect data or full system maturity”.
The phased approach to the NRRRS allows an initial version to be introduced within two years on a voluntary, opt-in basis, scaling up over five years. Over time, a co-ordinated national approach to property-level risk would be adopted.
“By linking resilience ratings to insurance pricing, lending, building standards, disclosure requirements and sustainable finance frameworks, the NRRRS creates a clear pathway for private investment in risk reduction, while enabling government support to be more targeted and effective,” the plan states.
Allowing householders, government programs, lenders and (re)insurers to use the system immediately, before any formal disclosure or pricing obligations, will enable early adoption, while supporting a staged transition to wider integration.
With short-term recommendations implemented within 12 months, over three years the Australian Reinsurance Pool Corporation could integrate the NRRRS into pricing and reward household resilience measures.
Work on funding resilience would continue, with the government backing resilience lending, banks offering loan products underpinned by the NRRRS, and the government, insurers and banks supporting the expansion of consumer advice services to inform homeowners and small businesses on the new credit and insurance products.
The medium-term aim is for all insurers to incorporate the NRRRS in premium pricing and to develop high-excess products to provide disaster cover linked to contingent lending from banks.
The plan sets a one-year target for insurers to develop products for small businesses supported by parametric reinsurance, to enable quick reinstatement of operations. It calls for more training for builders over the medium term, and for the Australian Building Codes Board to integrate the NRRRS into the National Construction Code.
Over five years, insurers should roll out: products that include a choice of “build back better”; longer-term products to lock in the benefits of investment in resilience; and high-resilience prefab or kit home replacement policies.
The core proposition of the Housing Resilience Action Plan is straightforward: when householders and markets are empowered to act, outcomes improve. When all the players involved work together, solutions can be found to improve resilience – and there is already a great deal to build on.
What happens now?
Workshops are planned to discuss policy challenges. These include whether insurance information on mortgaged homes should be shared and whether multiyear home insurance products should be developed, to align with mortgage terms.
Other topics will include public-private partnerships for resilience funding, development of community disaster adaptation plans, and how the plans might link to resilience funding.
While there have been calls for national standardised risk mapping that is publicly available, this will affect property values and local communities, so a workshop could consider how to govern the release of information.
