Shifting risks back to the state? Flood insurance and responsibility in the face of climate change in Australia

In Australia, with its neoliberal policy tradition, responsibility for dealing with severe and extreme weather events such as floods and bushfires has mainly been left to individual households and insurance markets. With the growing number of extreme weather events, existing institutional arrangements and behavioral patterns are challenged. Individuals have difficulties to reliably assess and manage knowledge about such climate change related hazards. In response to the growing uncertainties of rising costs due to increasing flooding and bushfire events, insurers raise their premiums for house and contents insurance or even withdraw from insuring high-risk areas altogether. Based on semi-structured interviews with 26 (re)insurance, legal, financial, and urban planning experts conducted in 2022, the study provides empirical insights in the still under-researched question of how responsibilities are understood and attributed amongst different stakeholders in the context of changing climate. The findings show that extreme weather events and the individualization of risk lead to new, complex patterns of sharing responsibilities amongst banks, insurers and the different governmental levels with a stronger emphasis on state regulation.