The Insurance Council of Australia (ICA) today welcomed the announcement by Assistant Treasurer, Stephen Jones, of a Parliamentary Inquiry into insurers’ response to the 2022 floods.
The Council said flooding in Northern NSW and South-East Queensland in February-March, in the Hawkesbury-Nepean in July, across three states in October, and in the Central West of New South Wales in November had contributed to a record year for insured losses.
The events have so far cost $7.17 billion in insured losses from more than 300,000 claims.
“Insurance is vitally important to Australian families and business and to the economy, giving people and businesses the protection and confidence to grow and prosper,” said ICA CEO, Andrew Hall.
“In 2022 insured losses across all categories totalled $36.5 billion from 5 million claims – meaning last year one quarter of adult Australians made an insurance claim.
“Any review that supports the ability of insurers to improve how they carry out their crucial function is welcome, and we look forward to participating.”
Mr Hall said that after three years of La Niña conditions and the pandemic, the 2022 floods had stress-tested the systems insurers use to respond to customers.
“This was exacerbated by issues such as a shortage of expert assessors, building labour and materials constraints, and the complexity of recovery and resilience programs delivered by state governments,” he said.
“We strongly support the Albanese Government’s focus on improving the resilience of Australian homes and communities against extreme weather events, but more needs to be done to ensure insurance remains sustainable as the climate worsens.”
In April, the ICA commissioned its own independent review of insurers’ response to the February-March 2022 floods, which is due for release in October.
That review will look to identify lessons learned from insurers’ response to the floods – both from good practice and practices requiring improvement – to better prepare and inform the industry’s response to future extreme weather events in a changing climate.
The Insurance Council is urging the Parliamentary inquiry to examine the impact of state insurance taxes on customers’ capacity to appropriately insure, as well as how the impact of past decisions on land use planning and disaster mitigation impact community risk and insurability.