The ICA’s second annual Insurance Catastrophe Resilience Report uses insurer data and insights to review the last 12 months of extreme weather events and advocate for changes to reduce the impact of future events.
Building resilience
The Cost of Extreme Weather – The McKell Institute
Commissioned by the ICA, The McKell Institute report, The Cost of Extreme Weather, shows that extreme weather events over the past 12 months cost every Australian household.
NSW Labor’s Western Sydney flood package welcomed
NSW Labor’s Western Sydney flood package welcomed
News release
Monday, 25 July, 2022
The announcement today that, if elected, a future New South Wales Labor Government would invest $225 million to make Western Sydney more resilient to flooding is a welcome first step, the Insurance Council of Australia (ICA) said today.
The $225 million Western Sydney Floods Resilience Plan announced by New South Wales Opposition Leader Chris Minns today includes a plan to invest $24 million to protect communities from large scale flooding by building new levees at Peachtree Creek, McGraths Hill and Pitt Town.
Some residents of Western Sydney have experienced flooding four times in the past two years, and the region is one of the most flood-prone in Australia.
The February-March 2022 floods were Australia’s most costly flood ever causing $4.8 billion in insured losses, approximately half of which was in New South Wales. The floods that impacted parts of New South Wales earlier this month have seen $145 million in damages in impacted parts of the State, including Western Sydney.
Earlier this year the Insurance Council released its Building a More Resilient Australia report, which called for $232 million to be jointly invested by the New South Wales and Federal Governments over five years to improve property resilience to flood, storm and bushfire.
Leading actuarial consultancy Finity estimated that this investment would save governments and communities $5.6 billion to 2050, 24 times a return on investment.
Building a More Resilient Australia also included a recommendation for a $532 million local infrastructure fund to support investment across the country in projects such as levees, seawalls and floodways.
New South Wales is the only mainland state – and will soon be the only state – to levy insurance customers to fund emergency services, adding 30 to 40 per cent to the cost a premium and driving down levels of insurance coverage.
Changes are also required to land use planning and building codes to make sustained improvements to community resilience.
Quote attributable to ICA CEO Andrew Hall:
Today’s announcement by New South Wales Labor is a welcome first step and shows that political stakeholders are heeding the resilience message insurers have been giving over a long period.
New South Wales is the highest-taxing state in the country when it comes to insurance, which drives down adequate coverage at a time and in a state where we need it most.
In the lead-up to next March’s state election the Insurance Council and insurers are calling on all parties to commit to abolishing this retrograde impost.
We look forward to the New South Wales Government’s response to the O’Kane / Fuller inquiry into the February-March floods, which must include significant investment in resilience measures and changes to land use planning.
ICA welcomes QBCC governance review recommendations
ICA welcomes QBCC governance review recommendations
News release
Friday, 1 July 2022
The Insurance Council of Australia (ICA) today welcomed the Queensland Government’s independent review into the Queensland Building and Construction Commission (QBCC), and congratulated the Government on taking immediate action to ensure Queensland homes are made more resilient to extreme weather.
The ICA has long called for governments at all levels to invest and improve measures to make Australian homes more resilient to worsening extreme weather.
An independent review of the role of developers within the Queensland building and construction industry is also welcomed, as is establishing a steering committee to monitor and report on the progress of the QBCC review recommendations.
The recommendations made in the review matches that made by the Insurance Council in Building a more resilient Australia, a report that outlined the pressing need to improve protections for Australians from extreme weather risk.
The ICA provided a submission to the QBCC governance review focusing on building reform and resilience.
Quote attributable to ICA CEO Andrew Hall:
As the regulator of the third largest contributor to the Queensland economy, the Queensland Building and Construction Commission has an integral role to play in improving the resilience of Queensland homes to worsening extreme weather.
The ICA and insurers are pleased with the recommendations of the independent review as it drives home the urgent need to improve resilience for homes, which will directly impact on premiums for at-risk communities.
Community resilience to flood can improve, new report finds
Community resilience to flood can improve, new report finds
News release
A new report released today by the Insurance Council of Australia (ICA) has found current land-use planning rules are not properly protecting Australians from worsening flood risk but can be improved.
Estimates show more than one million private properties, or about one in 10 homes, have some level of flood risk in Australia.
Revealed in the third of ICA’s Climate Change Impact report series, Flooding and Future Risks, the report identifies the need for an overhaul of the rules governing how and where new homes are built.
It notes as the climate continues to warm existing flood zones are likely to expand and expose more property and assets.
While the report focuses on modern homes (built post-2000) and managing flood risk to new development, it also identifies important measures to mitigate the risk of flood in established areas, such as investing in levees and floodways.
The report, which draws on analysis conducted by James Cook University Cyclone Testing Station in association with Risk Frontiers, leverages data from thousands of flood claims covering four recent flood events.
The report finds that:
Current land use planning settings and associated building controls do not eliminate flood risk to modern properties
The current building code does not consider building resilience to flood risk
There are key data gaps that prevent insurers and homeowners from building an accurate picture of flood risk, particularly in a changing climate.
The report identifies flooding as one of the costliest extreme weather events in Australia.
The total cost of floods, from river flooding and high intensity rainfall, since ICA records began in 1970 is in excess of $21.3 billion.
The cost of this year’s floods across south-east Queensland and northern New South Wales is estimated to be $3.346 billion, making it Australia’s costliest flood ever.
The report references analysis by financial actuary consultancy Finity for the Insurance Council, proposing a five-year $2 billion Federal Government resilience investment program to better protect Australians from flood as well as cyclones, bushfire and coastal risks.
Quote attributable to ICA CEO Andrew Hall:
This report again underscores the need to make better decisions in land use planning, building standards and government investment in mitigation works if we are going to end this cycle of flood impacts on homes and businesses in Australia.
Addressing the risks identified in this report will play a key role in better protecting communities in the face of worsening flooding and help improve access to affordable insurance coverage.
Updated data shows 2022 flood was Australias costliest
Updated data shows 2022 flood was Australia’s costliest
News release
Tuesday, 3 May 2022
The Insurance Council of Australia (ICA) today provided updated data on the storms and floods that impacted South-East Queensland and coastal New South Wales in February and March, showing that the event is estimated to be Australia’s costliest flood ever.
Using actual claims costs from 197,000 claims across both states, the event is estimated to have cost $3.35 billion in insured losses.
This makes the event the costliest flood in Australia’s history, and the fifth most costly disaster after the Eastern Sydney Hailstorm (1999, $5.57 billion), Cyclone Tracey (1974, $5.04 billion), Cyclone Dinah (1967, $4.69 billion) and the Newcastle Earthquake (1989, $4.24 billion). All normalised to 2017 values
The rise in claims costs compared to previous floods is being driven by higher costs in the Personal Property, Personal Contents and Commercial Property classes reflecting the increased cost of materials and a challenging supply chain environment.
More than 11 per cent of claims have already been closed and $580 million has already been paid to policyholders.
The updated data provides a more accurate picture of the cost and impact of the event and makes the case for investment in measures to lessen the impact of future events even more compelling.
In its recently released report, Building a More Resilient Australia, the ICA called on Australian governments to implement a range of measures to better protect households and communities from the impacts of extreme weather, including a doubling of Federal funding to $200 million a year over five years matched by the states and territories.
Quote attributable to Andrew Hall, CEO, Insurance Council of Australia:
We knew that this year’s east coast flooding was one of the biggest floods in our history, but these updated numbers show that in monetary terms it was in fact the biggest ever.
Only four other disasters have cost more, and this is not a record we want to beat.
That’s why it’s imperative that governments at State and Federal level commit to a significant increase in investment in programs to lessen the impact of future events.
We also need to plan better so we no longer build homes in harms way, make buildings more resilient to the impacts of extreme weather, and remove state insurance taxes which only discourage adequate insurance cover.
| All claims | $ Estimate | Property claims | Motor claims | Other claims |
Total | 196,761 | $3.34 billion | 169,961 (86.4%%) | 25,642 (13%) | 1,158 (0.6%) |
