Economic recovery after disaster strikes - volume two: When communities face flood, fire and hail

This report considers what role insurance played in restoring local economic activity and reducing the longterm impacts of these natural disasters. It examines three severe natural disaster events in Australia between 2019 and 2020: the Townsville floods, Black Summer bushfires, and East Coast hailstorms. Events of this kind are becoming increasingly common and present a real challenge for communities across the country. Natural disasters damage and destroy homes, business premises, vehicles and essential infrastructure. They also destroy crops and physical capital, close businesses, and disrupt normal economic production as workers cannot get to work or access required materials, leaving factories to sit idle.

Key findings:

• Without insurance, some communities will never recover from a natural disaster.
• This is especially the case in regional Australia, where there is increased risk of disasters and communities have a narrower economic base.
• Insurance helps to stabilise the economy following the disaster, and the economic stimulus promotes a more rapid return to normal economic activity.