Defence Service Homes (DSH) Insurance – Climate Change Statement


Climate change has the potential to threaten the viability of insurance in Australia and across the globe. Changes in the intensity and frequency of extreme weather events make risk calculations harder and can lead to a larger geographical area being adversely affected by an event, increasing the costs for insurance providers. 

This statement sets out DSH Insurance’s approach to address this important issue.

Australian Government position

DSH Insurance is administered by the Department of Veterans’ Affairs and aligns to the Australian Government in addressing climate change and ensuring energy security and affordability.

Australia is working to improve the environment, meet its climate change targets, and support an effective international response. For more information about how the Australian Government is addressing climate change, and meeting its commitments through the Paris Agreement the Department of Industry, Science, Energy and Resources website provides information on government and international initiatives.

Shared responsibility

As a shared risk and a shared responsibility, climate change presents pressures for the insurance industry. The risks include the physical impacts of a changing climate such as extreme weather patterns including storms, heavy rain, flooding, drought and bushfires.

Our climate change objectives

DSH Insurance is working to achieve the following objectives:

  1. Increasing awareness of the impacts of climate change on our business and embedding climate change issues and insights into our decision making, governance, risk management and business planning.
  2. Building resilience and reducing risk exposure by supporting policyholders to adapt and mitigate physical risks of climate change and by helping them prepare for, and recover from, extreme weather events.

Our action areas

Current action areas for DSH insurance include:

  • Identifying priority areas and scenarios for further assessment and modelling to better understand how our policyholders and business environment may change in coming years
  • Continuing pricing practices which make allowances for the impact of climate change
  • Providing access to resources and services to assist our policyholders to increase resilience and mitigate risks for natural disasters
  • Monitoring climate risk in relation to our claims experience as well as looking at external data sources to track the impact that climate change is having
  • Considering the need for an Environmental Sustainability policy to support staff and policyholder engagement
  • Continuing to  track Australian Government policy and industry wide initiatives, and
  • Providing reports to our Board on the risks and opportunities presented by climate change.

Industry led Initiatives

DSH Insurance looks for guidance on climate risk reporting and assessment from industry led initiatives such as the Climate Measurement Standards Initiative and the Insurance Council of Australia’s (ICA) Climate Change Action Committee.

DSH Insurance also recognises the reporting and compliance requirements of the APRA-regulated Insurance industry, including the new framework issued by the Financial Stability Board, and the Task Force on Climate-related Financial Disclosures. These frameworks are used to assess and disclose the emerging risks, opportunities and financial implications climate change poses for our business.

Further considerations

We note the work of  the UN Environment Programme’s Principles for Sustainable Insurance Initiative which has been  increasing its focus on climate change resilience with leading insurers currently developing a new set of forward-looking risk assessment tools, so that insurers can better understand the impacts of climate change on their business.