Friday, 22 April 2022

A NSW Government decision to change interstate building and construction licensing will make it easier for tradespeople to work across borders, the Insurance Council of Australia (ICA) today said.

The Automatic Mutual Recognition Scheme will enable qualified tradespeople from all states and territories, apart from QLD, to assist in community rebuilds following extreme weather events.

For impacted communities in Northern NSW, this announcement will bring welcome relief for policyholders waiting for urgent rebuild and repair work.

Since late last year, the ICA has been working with state and territory government and building industry associations to increase the availability of trades required to repair and rebuild properties following natural disasters.

Rapid response by tradespeople on the ground following disaster events helps communities to recover faster, and also provides an injection of funds into local economies.

Outside of natural disasters, insurance claims received every day provide regular work for many thousands of tradespeople, repairers and associated suppliers across Australia, most of which are small businesses. 

Insurers have received more than 81,700 claims in New South Wales from the recent floods, with losses estimated at $1.145 billion. More than 63,500 New South Wales claims are for property and more than 14,000 are for motor vehicles.

In total, insurers have received 180,245 claims from the extreme weather event across South East Queensland and Northern New South Wales, at an estimated cost of $2.523 billion.

Quote attributable to ICA CEO Andrew Hall:

The critical shortage of builders and trades across impacted regions continues to pose a challenge for communities affected by the recent extreme weather.

Mutual licensing recognition of builders and tradespeople between states and territories will go a long way to addressing this shortage and support faster community recovery from disaster.

This decision by the NSW Government is very welcomed, especially if it means labour can be better mobilised across borders and help communities rebuild faster.

Tuesday, 19 April 2022

The Insurance Council of Australia (ICA) today welcomed the NSW Government’s establishment of a Northern Rivers Reconstruction Corporation to help rebuild regions devastated following the recent floods.

The announcement follows a letter sent to the NSW Premier Dominic Perrottet last week, where the Insurance Council, with the support of other peak industry bodies, outlined the need for an overarching plan for the rebuild process, and the establishment of a high-level cross-sector leadership group.

The Insurance Council has long been calling for governments to do more to reduce flood risk at a community and property level, including changing land use planning arrangements so that no more homes are built on floodplains, and bring down the cost of premiums.

A poll undertaken last month found that an overwhelming 94 per cent of people surveyed say there should be better controls on where homes are built so they are not at risk of flood.

The ICA understands community concerns that the cost of flood cover can be prohibitively high for some who are faced with high flood risk, leading to them to opt out of flood cover altogether.  

Data collected from insurers related to last month’s flooding in South-East Queensland and Northern NSW, shows that in local government areas with a higher risk of flooding, the percentage of policyholders who made a claim and who have flood cover is lower than in areas with lower flooding risk.  

For example, in Lismore the percentage of policyholders who made a claim related to the March flood event who have flood cover is 31 percent, whereas in Ipswich that figure is 69 per cent.  

Insurance prices risk, which means that if a property is subject to a high risk of flooding the cost of flood cover will most likely be higher than a property that is not subject to the same risk.  

The ICA is encouraged to see actions taken by the NSW Government to better co-ordinate the rebuild and ensure flood risks at a community and property level are addressed.  

Quote attributable to ICA CEO Andrew Hall:

This is a very welcomed and crucial next step by the NSW Government. Successful cross-sector co-ordination bodies were established following previous significant disasters such as the 2011 Brisbane floods and after the 2011 Christchurch earthquake.

These included local, government, business, and civil society representatives empowered in making informed decisions on the rebuild and future resilience of the community.

Beyond the immediate clean-up and community recovery, it is clear there are complex issues to work through if we are to ensure the Lismore community is made more resilient to future flood events.

These issues include the construction of community resilience infrastructure such as levees, the future insurability and lendability of homes and businesses, land use planning, land use decisions by major commercial residents, and building codes and standards.

There are also several more short-term issues that may impact recovery, including the availability and cost of construction labour and materials, the availability of replacement motor vehicles, the availability of temporary accommodation, the availability of data, the impact of cash settlements, and the appropriateness of insurers providing 'like for like'.

We stand ready to work with this new body on all these important issues.

Wednesday, 12 January 2022

The Insurance Council of Australia today welcomed the announcement by Federal Labor that it would increase investment in measures to better improve the resilience of Australian communities to extreme weather.

The Prevent, Prepare, Rebuild plan would bring Federal investment in measures that protect communities from the impact of natural disasters to $200 million a year, a crucial change in the face of worsening extreme weather.

The plan also meets an important recommendation of the Productivity Commission’s Natural Disaster Funding Arrangements report, which found that 97 per cent of all disaster funding in Australia is spent after a natural disaster with just three per cent spent on measures prior to an event taking place.

Importantly, the policy ensures disaster recovery remains fully funded through the budget process.

Investment in projects that protect against the impacts of extreme weather have a demonstrable return.

Construction of the Launceston flood levee saved the community an estimated $216 million in recovery costs from an investment of $58 million, with the benefit from just one flood four times the expenditure.

The construction of a $15 million flood levee in Roma, Queensland in 2015 protected 483 homes and 75 businesses, reducing insurance premiums by an average of 34 per cent.

To ensure maximum return for communities, states and territories should be matching Federal investment.

The Victorian and New South Wales governments have increased resilience funding in their most recent budgets, however the Queensland Government, which faces the most significant threat from cyclone and cyclone-related flood, needs to do much more.

Comment attributable to Andrew Hall, CEO Insurance Council of Australia:

The Insurance Council has long been calling for the level of investment in resilience measures to be increased, and we warmly welcome today’s announcement by Federal Labor.

Regardless of the outcome of this year’s election, the next Australian Government needs to invest in stronger homes and infrastructure that makes communities more resilient in the face of worsening extreme weather.

This means investment in protecting the community, like levees and dams, and subsidies for households to improve a property’s resilience to wind, water, and fire.

The process of allocating investment in publicly funded resilience projects and infrastructure must be data-driven, independent of the political process, require business cases to support high-value projects, and be followed up with analysis of the project’s impact.