Justin Delaney

Zurich Financial Services Australia (Zurich) has released Australia’s first comprehensive Resilience Index, revealing more than one in five Australians face significant vulnerability, driven predominantly by financial insecurity.

The Australian Resilience Index – developed by Zurich in collaboration with Mandala Partners, the RedBridge Group and Accent Research – utilises two million proprietary and public data points and represents the first comprehensive, quantitative assessment of resilience across Financial, Health, Social and Environmental parameters at a local community level^[1].

Resilience, or the ability of people and communities to withstand and recover from shocks, is measured and aggregated across four dimensions:

• Financial Resilience, including savings, insurance coverage and superannuation balances;
• Health Resilience, including physical & mental health conditions, access to care and lifestyle factors;
• Social Resilience, such as crime rates, community participation and belonging; and
• Environmental Resilience, including planning, infrastructure and service availability.

Overall resilience was found to be most correlated with financial wellbeing, over social, health or environmental factors. Within individual measures, insurance coverage was identified as a key driver of overall resilience, with communities registering insurance penetration of 50 per cent or more being five times more likely to have higher financial resilience and four times more likely to have higher health resilience.

Of the nearly 2,500 local areas analysed, Cottesloe in Western Australia (WA) was identified as the nation’s most resilient, driven by the highest average dividend income rate in the country (16 times the national average), seven times higher average superannuation balances, double the insurance penetration, a third of the long-term health conditions, half the smoking rate and double the level of community volunteering.

Of the ten least resilient areas in the nation, half are located in the Northern Territory (NT), including the Tiwi Islands which scored lowest overall. Residents in this area are over 80 times more likely to live in crowded housing, experience five times the national rate of crime, have access to zero hospitals within 15 kilometres, and are more likely to experience weakened social belonging than any other local area.

Middle-aged males (35-49) are Australia’s most resilient demographic group, driven by high income levels (81 per cent earning above the median, versus 60 per cent of females the same age), higher superannuation balances & dividend incomes, and far lower rates of primary caregiving. This is despite poorer health resilience, driven by obesity, smoking and alcohol consumption, and lower social resilience, due to weakened belonging and “feeling like a stranger in their own country”.

Financial resilience

• Cottesloe (WA) is the most financially resilient community in the country, while the Torres Strait Islands in Queensland (QLD) is the least.
• Across jurisdictions, the Australian Capital Territory (ACT) has the highest and QLD the lowest levels of financial resilience.
• Across all communities, financial resilience rises sharply with age and is substantially stronger among men.

Health resilience

• Toorak in Victoria (VIC) has the highest health resilience in the country, while Bridgewater-Gagebrook in Tasmania (TAS) has the lowest.
• Across jurisdictions, New South Wales (NSW) has the highest and TAS the lowest levels of health resilience.
• Younger people (15–34) exhibit the highest health resilience, driven by substantially lower rates of obesity, long-term health conditions, smoking and care requirements. This is despite markedly higher rates of mental health conditions.
• Women are healthier on average than men, who are almost three times more likely to report unhealthy alcohol consumption, 50 per cent more likely to smoke, and 24 per cent more likely to be overweight or obese.

Social resilience

• City Beach (WA) has the highest levels of social resilience in the country, while Thamarrurr (NT) has the lowest.
• Across jurisdictions, the ACT has the highest and the NT has the lowest levels of social resilience.
• Social resilience is lowest among younger people (15–34), driven by half the rate of partnered relationships, lower rates of community participation, and an 83 per cent increased likelihood of experiencing household crime.
• Across the board, women are less socially resilient than males, including being four times more likely to be a single parent, 30 per cent more likely to feel uncomfortable expressing political views and 27 per cent more likely to report victimisation.

Environmental resilience

• Surry Hills (NSW) has the highest levels of environmental resilience in the country, while the Tiwi Islands (NT) has the lowest.
• Across jurisdictions, VIC has the highest and the NT the lowest levels of environmental resilience.
• Males and people aged over 34 are far more likely to have higher environmental resilience than other cohorts, driven by higher home ownership rates, living in areas with stronger economic & infrastructure investment and increased access to services.

Justin Delaney, Chief Executive Officer, Zurich said: “Insurance sits at the intersection of these four dimensions of resilience. It protects financial stability when shocks occur, supports health & wellbeing through prevention and recovery services, and relies on – and contributes to – social cohesion and environmental preparedness by pooling risks and supporting communities.”

“As Australia’s only major composite insurer, Zurich has a responsibility to use our data and insights broadly and systemically – to better understand the pressures facing our customers and the community to continue to evolve our propositions around prevention, early intervention and long-term protection.”

“We believe this Index can provide a unique and valuable perspective on a range of critical policy conversations and ways to target and prioritise public & private investments. More broadly, it highlights our increasing ability to understand both the prevailing risk and resilience environment and the benefits and return that accrues to early and proactive intervention at both a community and individual level,” Mr Delaney said.

Adam Triggs, Partner, Mandala said: “Australians face multidimensional risks – financial, economic, environmental, technological, social, geopolitical and health – and these risks are more correlated than ever before. The focus on resilience given the breadth, depth and unpredictability of these risks has never been more important.”

“Luckily, modern datasets and new data science techniques allow us to measure resilience at a granular level with significant clarity. This is what we do at Mandala, and we’re excited to use this Index to help governments, businesses and households to measure and improve their own resilience and better target support.”

“Which communities will be impacted most by interest rate rises? Which communities will bear the burden of chronic health conditions? How will technology changes impact different communities? Why are some communities turning to political extremes? Which communities are most at risk in the upcoming bushfire season? For the first time, this index lets us answer these questions and many more,” Mr Triggs said.

Kos Samaras, Director, Strategy & Analytics, the RedBridge Group said: “We tested this at the Secret Harbour by-election in Western Australia. The suburbs scoring lowest on financial and health resilience told us what was coming before a single vote was counted.”

“This index shows us where Australians have run out of buffer. When savings, insurance and super are thin, every shock lands harder, whether it’s a rate rise, a health scare, losing a job or a natural catastrophe. Those communities don’t just feel it in their bank balance, they demonstrate it in their trust in institutions and in how they vote. For governments and businesses trying to understand where the country is heading, the Resilience Index is now one of the most important lenses we have,” Mr Samaras said.

More about the Australian Resilience Index.

]]>

Justin Delaney

Zurich Financial Services Australia (Zurich) has released Australia’s first comprehensive Resilience Index, revealing more than one in five Australians face significant vulnerability, driven predominantly by financial insecurity.

The Australian Resilience Index – developed by Zurich in collaboration with Mandala Partners, the RedBridge Group and Accent Research – utilises two million proprietary and public data points and represents the first comprehensive, quantitative assessment of resilience across Financial, Health, Social and Environmental parameters at a local community level^[1].

Resilience, or the ability of people and communities to withstand and recover from shocks, is measured and aggregated across four dimensions:

• Financial Resilience, including savings, insurance coverage and superannuation balances;
• Health Resilience, including physical & mental health conditions, access to care and lifestyle factors;
• Social Resilience, such as crime rates, community participation and belonging; and
• Environmental Resilience, including planning, infrastructure and service availability.

Overall resilience was found to be most correlated with financial wellbeing, over social, health or environmental factors. Within individual measures, insurance coverage was identified as a key driver of overall resilience, with communities registering insurance penetration of 50 per cent or more being five times more likely to have higher financial resilience and four times more likely to have higher health resilience.

Of the nearly 2,500 local areas analysed, Cottesloe in Western Australia (WA) was identified as the nation’s most resilient, driven by the highest average dividend income rate in the country (16 times the national average), seven times higher average superannuation balances, double the insurance penetration, a third of the long-term health conditions, half the smoking rate and double the level of community volunteering.

Of the ten least resilient areas in the nation, half are located in the Northern Territory (NT), including the Tiwi Islands which scored lowest overall. Residents in this area are over 80 times more likely to live in crowded housing, experience five times the national rate of crime, have access to zero hospitals within 15 kilometres, and are more likely to experience weakened social belonging than any other local area.

Middle-aged males (35-49) are Australia’s most resilient demographic group, driven by high income levels (81 per cent earning above the median, versus 60 per cent of females the same age), higher superannuation balances & dividend incomes, and far lower rates of primary caregiving. This is despite poorer health resilience, driven by obesity, smoking and alcohol consumption, and lower social resilience, due to weakened belonging and “feeling like a stranger in their own country”.

Financial resilience

• Cottesloe (WA) is the most financially resilient community in the country, while the Torres Strait Islands in Queensland (QLD) is the least.
• Across jurisdictions, the Australian Capital Territory (ACT) has the highest and QLD the lowest levels of financial resilience.
• Across all communities, financial resilience rises sharply with age and is substantially stronger among men.

Health resilience

• Toorak in Victoria (VIC) has the highest health resilience in the country, while Bridgewater-Gagebrook in Tasmania (TAS) has the lowest.
• Across jurisdictions, New South Wales (NSW) has the highest and TAS the lowest levels of health resilience.
• Younger people (15–34) exhibit the highest health resilience, driven by substantially lower rates of obesity, long-term health conditions, smoking and care requirements. This is despite markedly higher rates of mental health conditions.
• Women are healthier on average than men, who are almost three times more likely to report unhealthy alcohol consumption, 50 per cent more likely to smoke, and 24 per cent more likely to be overweight or obese.

Social resilience

• City Beach (WA) has the highest levels of social resilience in the country, while Thamarrurr (NT) has the lowest.
• Across jurisdictions, the ACT has the highest and the NT has the lowest levels of social resilience.
• Social resilience is lowest among younger people (15–34), driven by half the rate of partnered relationships, lower rates of community participation, and an 83 per cent increased likelihood of experiencing household crime.
• Across the board, women are less socially resilient than males, including being four times more likely to be a single parent, 30 per cent more likely to feel uncomfortable expressing political views and 27 per cent more likely to report victimisation.

Environmental resilience

• Surry Hills (NSW) has the highest levels of environmental resilience in the country, while the Tiwi Islands (NT) has the lowest.
• Across jurisdictions, VIC has the highest and the NT the lowest levels of environmental resilience.
• Males and people aged over 34 are far more likely to have higher environmental resilience than other cohorts, driven by higher home ownership rates, living in areas with stronger economic & infrastructure investment and increased access to services.

Justin Delaney, Chief Executive Officer, Zurich said: “Insurance sits at the intersection of these four dimensions of resilience. It protects financial stability when shocks occur, supports health & wellbeing through prevention and recovery services, and relies on – and contributes to – social cohesion and environmental preparedness by pooling risks and supporting communities.”

“As Australia’s only major composite insurer, Zurich has a responsibility to use our data and insights broadly and systemically – to better understand the pressures facing our customers and the community to continue to evolve our propositions around prevention, early intervention and long-term protection.”

“We believe this Index can provide a unique and valuable perspective on a range of critical policy conversations and ways to target and prioritise public & private investments. More broadly, it highlights our increasing ability to understand both the prevailing risk and resilience environment and the benefits and return that accrues to early and proactive intervention at both a community and individual level,” Mr Delaney said.

Adam Triggs, Partner, Mandala said: “Australians face multidimensional risks – financial, economic, environmental, technological, social, geopolitical and health – and these risks are more correlated than ever before. The focus on resilience given the breadth, depth and unpredictability of these risks has never been more important.”

“Luckily, modern datasets and new data science techniques allow us to measure resilience at a granular level with significant clarity. This is what we do at Mandala, and we’re excited to use this Index to help governments, businesses and households to measure and improve their own resilience and better target support.”

“Which communities will be impacted most by interest rate rises? Which communities will bear the burden of chronic health conditions? How will technology changes impact different communities? Why are some communities turning to political extremes? Which communities are most at risk in the upcoming bushfire season? For the first time, this index lets us answer these questions and many more,” Mr Triggs said.

Kos Samaras, Director, Strategy & Analytics, the RedBridge Group said: “We tested this at the Secret Harbour by-election in Western Australia. The suburbs scoring lowest on financial and health resilience told us what was coming before a single vote was counted.”

“This index shows us where Australians have run out of buffer. When savings, insurance and super are thin, every shock lands harder, whether it’s a rate rise, a health scare, losing a job or a natural catastrophe. Those communities don’t just feel it in their bank balance, they demonstrate it in their trust in institutions and in how they vote. For governments and businesses trying to understand where the country is heading, the Resilience Index is now one of the most important lenses we have,” Mr Samaras said.

More about the Australian Resilience Index.

The post Launch of Australian Resilience Index shows the threat of financial insecurity appeared first on AdviserVoice.

Justin Delaney

Zurich Financial Services Australia (Zurich) and Mandala Partners (Mandala) has released Australia’s first Climate Risk Index for the Australian tourism sector.

Utilising Zurich’s global exposure analysis capability, the report analyses the impact of climate change on Australia’s top tourism sites – including major airports, national parks, beaches and museums – under different Intergovernmental Panel on Climate Change (IPCC) scenarios.

The Index – the first comprehensive, quantitative climate assessment of its kind for Australian tourism – finds that currently, half of Australia’s tourism assets are in an elevated risk category, facing considerable climate and natural peril risk.

This is set to rise to between 55 and 68 per cent of Australian tourism sites by 2050 under either an intermediate (two degrees Celsius of warming by 2041-2060) or extreme (three degrees) IPCC future climate scenario respectively. Under the more extreme scenario, 80 per cent of tourism sites will experience an increase in risk between 2025 and 2050.

Australia’s tourism industry plays an important role in the nation’s economy, contributing more than $170 billion in annual expenditure and over 620,000 jobs.

In terms of economic impact, around 30 per cent (up to 176,000) of these jobs nationally could be jeopardised – 65 per cent of which are outside our capital cities – in the event of a disaster scenario similar to that experienced following the bushfires of 2019-20.

The analysis also reveals that climate risk varies significantly by geography and site type (natural or man-made).

Queensland has both the highest number of sites facing elevated risks (79 per cent) and the most sites in the highest risk category (52 per cent) compared to any other jurisdiction. After Queensland, Western Australia and the Northern Territory have 69 per cent and 63 per cent of sites in the highest risk categories, respectively. Across the southern states, the risks were relatively lower.

By site category, the Index finds that all 31 of the busiest airports in Australia fall into the highest climate risk categories, including 94 per cent in the most extreme category, due to their geographic location and susceptibility to perils such as wind and storms.

Similarly, all of the analysed wine growing regions, botanic gardens, scenic roads & rail, and rainforests & national parks were found to be in the highest climate risk categories. Natural geological formations, museums, galleries and stadia face relatively lower risk.

Justin Delaney, Chief Executive Officer, Zurich Australia & New Zealand, said: “Australia’s tourism assets not only play a significant role in an increasingly diverse visitor economy but are collectively central to our national identity.”

“This analysis, conducted in partnership with Mandala, serves to highlight the critical importance of improving resilience across our tourism assets, both to ensure the sustainability and longevity of these sites and to minimise downstream economic impacts – particularly in regional areas – on employment, business formation, consumption and investment.”

“More broadly, it also serves to highlight the quantum of data and insights that are available to understand the prevailing risk environment in order to shape and prepare our collective response,” Mr Delaney said.

Adam Triggs, Partner, Mandala Partners, said: “In Australia, we have focused a lot on how to reduce carbon emissions but have focused less on how to prepare for the physical impacts of climate change that we are already seeing: tourist attractions destroyed by bushfires, tourism sites made inaccessible by floods, man-made attractions damaged by hail and airports closed because of extreme winds”.

“A key reason for Australia’s more limited focus on the physical impacts of climate change is a lack of data, and this is exactly the gap that our partnership with Zurich seeks to fill,” Dr Triggs said. 

The release of the Climate Risk Index for the tourism sector builds upon and follows a similar analysis by Zurich and Mandala on the climate risk facing the Australian energy generation sector in November 2023, the first assessment of its kind for an entire critical infrastructure asset class.

Read the report. 

Justin Delaney

Zurich Financial Services Australia (Zurich) and Mandala Partners (Mandala) has released Australia’s first Climate Risk Index for the national energy generation sector.

Utilising Zurich’s global exposure analysis capabilities, the report analyses the location of every energy generation asset across the country to form insights on the impact of climate to the grid under different Intergovernmental Panel on Climate Change (IPCC) scenarios.

The index – the first comprehensive, quantitative climate assessment of its kind for an entire critical infrastructure asset class – found that under a likely intermediate climate scenario that assumes two degrees Celsius of warming by 2041-2060:

• currently more than a quarter of Australian energy generation is in the three highest climate risk categories
• this is set to rise to around 35 per cent of generation capacity by 2050, and
• nearly 40 per cent of generation assets will experience increased climate risk over this period.

Under a more extreme climate scenario that assumes four degrees Celsius of warming over the same period, 43 per cent of Australia’s generation capacity will fall in the three highest risk categories by 2050, including 11 per cent of generation in the highest risk category.

The analysis also reveals that risk varies significantly by geography and generation type.

Western Australia and the Northern Territory, whose electricity grids run separately from the National Electricity Market, are particularly vulnerable. Based on the Index, 96 per cent of generation in the NT is in the three highest risk categories, including 85 per cent of generation in risk category four. Similarly, WA and Tasmania were found to have 70 per cent and 52 per cent in the three highest risk categories, respectively. Across the eastern and southern States, the risks were relatively lower.

By generation type, solar power and natural gas face significantly higher climate risks than other generators. The index found that 95 per cent of dedicated solar generation sites – due to their susceptibility to perils such as storms and hail – and 54 per cent of natural gas plants were in one of the three highest risk categories. Other forms of renewable energy like wind and biogas/biomass sat alongside coal with relatively low risk.

Justin Delaney, Chief Executive Officer, Zurich Australia & New Zealand, said: “Australia’s energy generation assets underpin almost every aspect of economic and social interaction in the 21^st century, however, much of the focus to date has centered on the risk of the energy grid to climate change, rather than on the risk of climate change to the grid.”

“Insurers are on the front line of risks relating to climate change, including natural disasters and extreme weather events. Undoubtedly therefore, the planet’s sustainability and actions to transition to renewable energy sources remain a critical priority.”

“This analysis hopefully represents a constructive input into achieving an appropriate and resilient energy transition. More broadly, it also serves to highlight the quantum of data and quality of insights that are now available to understand the prevailing risk environment so we can shape and prepare our collective response,” Mr Delaney said.

Adam Triggs, Partner, Mandala Partners, said: “This report reminds us that there is no part of our economy or society not impacted by the effects of climate change. Successfully navigating the energy transition is essential for our economy and our environment, but it will also be complex and uncomfortable.”

“As our report shows, our energy grid needs to be more resilient to climate events. Proper site selection and planning for new generation is critical given variability in hazard type and severity is significantly impacted by geography and topography. Beyond this, adaptation measures are also important for building resilience, particularly for existing sites.”

“Mandala is proud to have partnered with Zurich to produce this report, in what we see as an important contribution to the growing evidence base in how to support the energy transition and ensure it is as effective and efficient as possible,” Mr Triggs said.

Read the full report.