Is property resilience improving in the face of bushfire risks?

Is property resilience improving in the face of bushfire risks? | Insurance Business Australia

Catastrophe & Flood

Is property resilience improving in the face of bushfire risks?

Examining the risks after the warmest August on record

Catastrophe & Flood

By
Daniel Wood

The Australasian Fire and Emergency Services Authorities Council (AFAC) has released its Seasonal Bushfire Outlook for Spring 2024. As a result of the recent high temperatures – including the warmest August on record – the Bushfire Outlook showed an increased risk of fire across large areas of Victoria, Queensland and the Northern Territory.

Commercial property stakeholders, including insurers and brokers, are likely looking for ways to encourage their insureds to address these heightened risks.

Mike Hunneyball (pictured above) said the context for the report’s findings is bushfire seasons becoming more intense and longer, driven by changing climate patterns and increased temperatures globally.

Hunneyball is Melbourne-based operations chief engineer for FM, the multinational commercial property insurer.

What’s critical to the business?

He said improving resilience to fire and other risks doesn’t come down to a single pressure point.

“When working with businesses to improve their resilience, it is important to first understand what assets – equipment and buildings – are critical to the successful operation of the business,” said Hunneyball.

FM’s expert said risk advisers should then look at any systems in place to protect these assets, including sprinklers, and also what external risks are present. These might include climate-related risks that could result in losses and business interruption.

“Risk mitigation strategies specific to bushfire threats span vegetation management around buildings, building design and maintenance, adequate emergency preparedness and bushfire response planning,” said Hunneyball.

Inspection and maintenance routines are also important, he said, to ensure fire protection systems, including sprinklers, fire alarms and water supplies, are in working order.

In a previous IB interview, Hunneyball identified embers as an important property risk that can travel kilometres.

“You may be further enough away from vegetation to not have the radiant heat of the fire coming straight up to the building, but embers can travel over kilometres so you can have ember attacks on your buildings,” he said.

He said mesh screens can be used to close off gaps to stop embers getting into a building.

“It’s about stopping embers getting up behind eaves in the rooftop or gaps underneath the building, or around windows and doors,” said Hunneyball.

The Index ranks countries based on their resilience against factors including climate risk exposure. Out of 130 countries, Australia’s overall rank is 13.

Hunneyball said the Index takes a range of macro and physical factors into account, including climate risk quality and exposure, climate change exposure, fire risk quality, cybersecurity, political risk, inflation, health expenditure and more.

Australia is actually first on the Index for education but then drops to between 15th and 20th place for indicators including internet usage, health expenditure, climate risk quality and fire risk quality.

“When it comes to fire risk quality, this rank and score consider the quality and enforcement of Australia’s building codes and standards,” said Hunneyball. “These standards are high with respect to fire-based design, combined with the level of fire risk improvement achieved given the fire risks present.”

Where can Australia improve bushfire resilience?

However, he said one area where Australia could improve resilience is construction regulations for commercial buildings

“While the National Construction Code and Australian Standards relating to construction requirements in bushfire prone areas are clear and comprehensive, they currently don’t include many types of commercial buildings, which factors into overall resilience – especially for businesses,” said Hunneyball.

There are other climate risks, he said, where Australia could improve.

“Hail risk is also a key exposure in Australia, especially given the rapid construction and installation of renewable energy infrastructure such as rooftop and ground mounted solar farms,” said Hunneyball. “We have no mapped hail risk areas recognised by our standards and codes.”

For Victoria, the report said a “notably dry autumn and winter period” is a driver of fire risks in the state.

In Queensland grassland fire activity, said the Outlook, is likely during the early months of spring.

Across the Northern Territory, the report said increased fire risk is likely around Alice Springs, Barkly and Savanna Fire Management Zones and it urged landholders to ensure fire management plans are current and in place.

Are you an insurer or broker? How are you preparing your insureds for bushfire risks? Please tell us below

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