More than one in five Australians is facing significant vulnerability, with financial security the strongest factor affecting overall resilience, according to a new index launched by Zurich. 

Insurance coverage is a key driver of that financial resilience, the study showed.   

The Australian Resilience Index, developed with Mandala Partners, RedBridge Group and Accent Research, analysed almost 2500 local areas using two million proprietary and public data points across financial, health, social and environmental parameters. 

Zurich says financial wellbeing is more closely correlated with overall resilience than the other three measures – health, social and environmental – and insurance coverage is central to that ranking.  

Communities with insurance penetration of at least 50% are five times more likely to have higher financial resilience and four times more likely to have higher health resilience, according to the index. 

The index found wide variations between communities. Cottesloe in WA is ranked as the most financially resilient area overall, while the Torres Strait Islands in Queensland are the least.  

The ACT recorded the highest financial and social resilience among the states and territories, while Queensland had the lowest financial resilience and the NT the lowest social resilience.

The index also identified significant demographic differences. Men aged 35 to 49 were the most resilient demographic group overall, supported by higher incomes, superannuation balances and dividend income, although they recorded weaker health resilience linked to obesity, smoking and alcohol consumption. 

Zurich CEO Justin Delaney says insurance is central to all four dimensions of resilience. 

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

Click here to see the index. 

  

“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,” he added. 

More information on the Australian Resilience Index can be found online: https://www.zurich.com.au/latest-news/australian-resilience-index