Weathering the storm: Rethinking emergency management for a changing climate

Dorothea Mackellar’s timeless words capture both the beauty and the volatility of Australia’s landscape: “I love a sunburnt country, a land of sweeping plains, of ragged mountain ranges, of droughts and flooding rains.”

Of course, Mackellar’s droughts and flooding rains were a little less frequent and a little less extreme than they sometimes seem to us today. The volatility of the Australian landscape has been amplified by a climate that is shifting faster than our systems can adapt.

The Commonwealth’s National Climate Risk Assessment and the Colvin Review of Commonwealth Disaster Funding both underscore the urgency of the challenge: climate-driven disasters are increasing in frequency and intensity, with worst case projections suggesting total economic losses of $4.2 trillion within a generation. Globally, the midterm review of the Sendai Framework for Disaster Risk Reduction confirms the same trend: risks are escalating and cascading across borders, sectors, and systems.

But this is not a story of systems failing. It is a story of institutions under pressure, adapting, and finding new pathways forward. The opportunity before us is clear: to shift decisively from reactive response to proactive resilience, building on the strengths of existing institutions and partnerships, and investing in the capabilities that will define a safer, more resilient Australia.

At Nous, we have been working across the emergency management sector for nearly two decades, partnering with all levels of government, NGOs, and private organisations. We see the impacts of disasters on communities first-hand, and we know the challenge for governments is not simply to respond better, but to fundamentally change how risk is managed. Australia cannot afford to keep treating resilience as an aspiration while pouring the bulk of funding into recovery. The real test is whether governments can shift from a reactive model to one that is genuinely proactive, balancing cost-of-living pressures, housing needs, and fiscal sustainability against the escalating risks of climate-driven disasters.

To achieve this transformation, collaboration across all levels of government, the private sector, and local communities is essential. Meaningful progress will require not only policy reform and smarter investment, but also a cultural shift that places a premium on forward-looking risk assessment and community-led adaptation. By fostering partnerships, leveraging new technologies, and embedding resilience into every stage of planning and development, Australia can position itself to weather future storms more effectively and ensure that preparedness becomes a shared national priority.

Australia’s disaster management system is still dominated by recovery, a legacy of both structural and contextual pressures. Rising cost-of-living and housing affordability challenges make it politically difficult to restrict development, even in high-risk areas. Meanwhile, the insurance sector is under strain, retreating from hazard-prone markets or pricing premiums out of reach. Governments, in turn, face mounting fiscal exposure as the backstop when households and banks absorb escalating losses. Yet there are good foundations to build on. The Colvin Review laid out reform pathways, and the Hazards Insurance Partnership (HIP) with the National Emergency Management Agency (NEMA) is mapping a national risk picture that could underpin smarter, more targeted investment. The bones of a proactive system exist – we now need to pivot decisively. This means shifting:

• From ad-hoc recovery to pre-planned resilience. Australia cannot continue to rely on piecemeal disaster grants and drawn-out rebuild processes that lock in vulnerability. A forward-leaning model requires recovery to be the exception, not the rule, with resilience embedded before disasters strike.
• From unchecked growth in hazard zones to risk-based planning. Allowing housing and infrastructure expansion in known floodplains, bushfire corridors, and cyclone coasts only compounds future losses. Development decisions must be made with a sober view of long-term risk, not just short-term affordability.
• From market retreat in insurance to risk-sharing models. As insurers either withdraw coverage or set unaffordable premiums, risk is being transferred silently onto households, banks, and governments. This trajectory is unsustainable and demands a fairer distribution of responsibility across the system.
• From siloed investment to coordinated resilience funding. Resilience cannot be treated as the domain of emergency agencies alone. Disasters cut across housing, transport, water, and environmental systems, making it essential that investment is coordinated and attribution shared across portfolios.

Australia can draw valuable lessons from the experiences of our international counterparts, both in terms of their successes and the challenges they have faced.

For example, it can learn from New Zealand’s use of insurance and planning to make risk visible and enforce discipline in high-hazard areas. Under New Zealand's national hazard insurance scheme, repeat insurance claims on a parcel of land can lead to insurance withdrawal, with this status recorded on the land title, a transparency mechanism that sends clear signals to planners, lenders, and buyers. The country’s centralised national hazard insurance structure also enables coordinated data sharing, risk modelling, and planning responses, which Australian states could emulate through shared databases linking spatial planning with real claims and payout data. These mechanisms work alongside legal requirements for councils to consider natural hazard risks in zoning and development decisions, limiting exposure. While debates continue about balancing housing growth with affordability, New Zealand demonstrates how embedding transparency and coordination into insurance and planning strengthens long-term resilience.

Similarly, France shows the potential of pooling risk to provide broad coverage while sharing costs across the population. The country's CATNAT system, established in 1982, provides universal catastrophe insurance by automatically including natural disaster cover in all property insurance policies, funded through a flat-rate surcharge that pools risk across the nation and is backed by state-guaranteed reinsurance via the Caisse Centrale de Réassurance. However, rising climate-driven losses have driven increases in premiums. Because premiums are not risk-based, low-risk regions subsidise high-risk ones, creating questions of fairness and incentives, and prompting debate about reforms to better align contributions with exposure and tie insurance more directly to land-use planning and risk reduction.

Finally, the United States illustrates the dangers of underpricing risk. The National Flood Insurance Program (NFIP) provides subsidised flood coverage in high-risk areas, but artificially low premiums have encouraged repeated rebuilding in hazard zones, creating a persistent financial deficit and escalating exposure. This experience highlights the importance of linking insurance coverage to hazard-informed land-use planning and proactive risk reduction, rather than relying on subsidies that encourage risky development

These examples underscore that Australia has more options it can explore – such as co-funded insurance and comprehensive, hazard-informed planning – while being mindful of the pitfalls, ensuring that reforms are both effective and sustainable.

For Australia, the path forward involves a multi-layered approach to proactive resilience. Firstly, land-use planning must reflect the reality of escalating climate risks, gradually reducing exposure by steering development away from hazard-prone zones.

Second, governments should adopt a suite of complementary funding and risk-sharing mechanisms:

• Pre-authorised mitigation packages that are ready for immediate activation when thresholds informed by the national risk picture are reached.
• Multi-year recovery funding envelopes tied to measurable resilience outcomes, which ensure that post-disaster investment strengthens long-term adaptive capacity rather than simply covering immediate losses.
• Distributed attribution model for multi-portfolio mitigation spend, enabling departments such as housing, transport, water, and environment to co-invest in shared resilience initiatives, with clear attribution rules and KPIs.
• To operationalise this approach, state governments could pilot pooled mitigation funds under this model, accelerating cross-sector collaboration and linking investment directly to agreed resilience outcomes.

Complementing these reforms, co-funded insurance models can help manage residual risk while incentivising mitigation. A national resilience reinsurance pool (similar to the reinsurance pool for cyclones and related flood damage), co-financed by Commonwealth, state, and private insurers, could provide baseline coverage for households in high-risk regions, contingent on mitigation measures such as cyclone-proofing or flood-resistant retrofits.

Taken together, these shifts – combining strategic land-use planning, proactive and multi-year funding, distributed co-investment, and targeted insurance solutions – mark a genuine pivot from reactive to proactive disaster management. They would also give households, communities, and governments something long missing: confidence that resilience is not just promised, but actively embedded into the way Australia plans, invests, and protects itself from escalating disasters.

We believe governments can seize this moment to act decisively. By learning from international lessons, reforming disaster finance to support preparedness, and tackling the interlocking challenges of insurance, land use, and housing head-on, Australia can build a system that protects people, property, and public finances before the next disaster strikes – not just in the aftermath.

Get in touch to discuss how we can help you turn complex risk challenges into practical, integrated resilience solutions. 

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