Submission into non-conforming cladding

IAG welcomes the opportunity to make an additional submission to the Senate Inquiry into nonconforming building products, specifically on the implications of the use of non-compliant external cladding materials in Australia.

As an insurer our primary role is to help customers manage their risk and mitigate against the financial losses they are covered for. At IAG our purpose is to help make the world a safer place for the customers and communities we serve. We insure over three million homes, businesses and farms and take seriously our role in rebuilding people’s homes, businesses, farms and lives following misfortune or disaster.

In recent years, modern construction and building design in Australia has seen an increase in the use of plastic foam cladding, particularly in high rise buildings. In our experience this cladding is highly combustible and poses a fire risk much higher than other materials available, particularly when paired with equally combustible plastic foam insulation. Additionally, these materials are often being used in a way that does not conform with the National Construction Code (NCC) and Australian Standards, this is a concern to IAG as:

• This threatens the safety of our customers, employees and the broader community;
• It increases the fire risk of buildings placing upward pressure on premium cost for consumers; and
• Non-compliance is a hidden risk. If we cannot accurately assess risk, the uncertainty results in sub optimal outcomes for customers and insurers.