Rising premiums to force more homeowners to drop insurance, APRA warns
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The annual bill for cleaning up natural disasters caused by climate change is expected to more than double over the next two decades, worsening insurance affordability. This will create credit risk for banks that use residential property as loan security, as a widening insurance 'protection gap' emerges.
Australia's prudential regulator warns that the cost of natural disasters will significantly increase. The annual bill is expected to more than double over the next 20 years. This will worsen insurance affordability and create credit risk for banks. The 'protection gap' between insurance coverage and actual recovery costs will grow. Banks use residential property as security for loans, making them vulnerable to this risk. The regulator's warning highlights the need for action to address the financial impacts of climate change.
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