Insurance Council of Australia

Cyclone & storm

New data shows historic catastrophes would have greater impact today

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New data shows historic catastrophes would have greater impact today

News release

Wednesday, 12 September 2023

New data released by the Insurance Council has revealed that the cost of both the 1999 Sydney Hailstorm and Cyclone Tracy would far outstrip last year’s record-breaking flood if they happened today.

  • The Sydney Hailstorm, which caused $1.7 billion in insured losses when it rained cricket-ball-sized hailstones on the city in April 1999, would result in an estimated $8.85 billion in insured losses if it happened in 2023.
  • Cyclone Tracy, which killed 71 people and caused $200 million in insured losses when it struck Darwin on Christmas Eve 1974, would cause an estimated $7.4 billion in insured losses in 2023.
  • The 2022 South-East Queensland and New South Wales Floods cost $6 billion in insured losses and remain the costliest extreme weather event in our history.

The new data, calculated by Australian catastrophe modelling firm Risk Frontiers, uses methodology that normalises the losses of past insurance catastrophes to account for inflation, changes in property numbers and values, and stricter building codes, enabling insurers, reinsurers, governments, and other policymakers to better understand the likely impact of future extreme weather events.

The changes in estimated insured losses for the historic events is due to the increase in people and property across Australia, particularly in large population centres, underscoring the need for greater investment in measures to make at-risk communities more resilient to extreme weather.

Risk Frontiers has also provided updated data on historic insurance catastrophes adjusted for inflation only, allowing a comparison of actual insured losses from events over the last half century.

The new data is included in the ICA’s annual Insurance Catastrophe Resilience Report, which also examines the most pressing issue currently facing the Australian insurance industry and its customers – affordability and availability – and the clear link between risks and costs.

The report calls for increased investment in resilience and mitigation measures as part of an ongoing program to reduce risk and cost pressures, the end of development on floodplains, the broadening of home buy-back schemes to move people out of danger, improved building codes to make buildings more resilient, and reform of state taxes on insurance products to provide immediate cost relief.

Comment attributable to Insurance Council of Australia CEO Andrew Hall:

The financial impact of insurance catastrophes over the past 12 months was around one fifth of the cost of the previous record-breaking year, but more benign weather conditions should not provide false hope that the issues of worsening extreme weather risk have gone away.

This new data shows that when – not if – extreme weather events strike large population centres in the future we can expect them to have a greater impact and be more costly, making the case for risk mitigation even more pressing.

We can’t wait until disaster strikes, we need to act now by investing more to make communities more resilient, reform land-use planning and building codes and, in some cases, move people and homes out of danger altogether.

Read Full Report here

Useful links

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Buying insurance before an event

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When to buy insurance

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Buying a policy before an event

Some types of insurance may benefit you if they are bought in advance, such as travel insurance. Travel insurance may be purchased as soon as the deposit for the trip is paid. It usually does not cost any more to purchase the cover at this time, and the cancellation cover can start straight away.

Embargoes

Insurers often place embargoes on insurance policies to prevent people buying insurance when the risks are elevated or a disaster is approaching and then cancelling cover after the risk passes. 

Embargoes on insurance are a normal and accepted practice, and usually apply to new policies. They take effect when events such as fires, floods and cyclones are impacting or considered likely to impact an area. 

If an insured risk is imminent, the probability of that risk occurring and therefore a claim being lodged is high. Insurers would need to calculate a premium that reflects this elevated risk, rather than averaging the risk over an entire year.

However, not all insurers impose embargoes. Australia’s insurance market is large and highly competitive, and at any one time there are usually insurers who have not enacted an embargo, and property owners may be able to find cover.

Useful links

Premiums Explained
Reduce Your Risk
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Preparing for cyclone

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Preparing for cyclone

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A cyclone is a violent storm with very high winds rotating around a calm centre of low pressure. Cyclones can cause destructive winds of more than 280kmh, as well as floods, storm surges and widespread damage.

In Australia, cyclones of varying intensity generally occur between November and April each year. The Bureau of Meteorology provides a seasonal outlook, which includes cyclones.

The parts of Australia most at risk of cyclones are northern Queensland, northern Western Australia and the Northern Territory and the typical Australian tropical cyclone season averages nine to 13 tropical cyclones.

The strong wind, heavy rain and flying debris caused by a cyclone can extensively damage property. 

In the mid 1980’s a cyclone building code was introduced for new properties built in cyclone-prone regions. This is intended to protect the residents from harm. There are also a number of retrofitting opportunities for homes at-risk of cyclone that may assist. This includes: 

  • Strengthening doors and windows with products such as storm shutters and debris screens
  • Strengthening garage doors with wind locks that make it harder for doors to blow in
  • Roof retrofitting to strengthen key tie-down points.

Residential properties are still vulnerable to extensive damage, which can be very expensive to repair. Many strata-title properties also have features that can be badly affected during cyclones, such as underground car parks, lifts, pools and landscaped gardens, annexes and sheds.

Before a cyclone

If you live in a cyclone-prone area you should assess your risk. Ask your local council if your property is within a cyclone evacuation zone and if your area is prone to flash or riverine flooding or storm surge.

Planning ahead is the best way to protect your family, home, business and assets from cyclones. Insurance helps to do this, so review your insurance policies and ensure your level of cover is appropriate.

If you are not insured, your recovery will depend on your own financial resources and assistance that may be available from government or non-government agencies.

You can take practical steps to reduce the damage caused by a cyclone. This includes:

  • Prepare a disaster plan, including identifying the strongest part of your property in which to shelter during a cyclone 
  • Prepare a household inventory of the contents of your home
  • Prepare a disaster supply kit, with cash, food, water, toiletries, medication, a household contents inventory, copies of important documents, protective clothing, a radio and a torch – and batteries for both
  • Maintain your property to ensure there is no corrosion, rotten timber or loose fixtures that could weaken the structures
  • Remove dead or rotting trees and trim branches that overhang the property and keep gutters clear
  • Install appropriate windows or shutters to glass windows and doors and ensure all locks are strong enough to withstand strong wind
  • Check the condition of your roof and repair any damage or loose tiles
  • Know where and how to turn off mains power, water, gas and solar power
  • Familiarise yourself with your insurance policy. Find out what is included in the policy and understand its exclusions. Contact your insurer if you have questions.

Useful links

Help in a disaster
What to do in the event of a cyclone
Reduce your Risk
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Insurers revisit NSW Central-West flood communities

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Insurers revisit NSW Central-West flood communities

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News release

Tuesday, 7 March 2023

The Insurance Council of Australia (ICA) and insurers will be in Eugowra, Parkes and Forbes in mid-March to assist flood-impacted communities with their insurance claims.

The in-person customer meetings are part of a continuing effort by the insurance industry to assist policyholders with their flood-related claims.

These meetings are an opportunity for customers to discuss their individual claims with their insurer.

The Wednesday 22 March evening community information session in Parkes will provide an overview of the claim process and will include how to lodge a complaint.

Policyholders from surrounding areas are encouraged to attend the information session and book a consultation for individual claim assistance.

• Eugowra Bowls & Recreation Club, 5 Hill Street Eugowra
Tuesday 21 March 12pm – 8 pm in-person customer meetings with insurers.
• Parkes Services Club, 17 Short St Parkes
Wednesday 22 March 10 am – 4 pm in-person customer meetings with insurers.
Wednesday 22 March 5pm-8pm Community information session
• Club Forbes, Templar St Forbes
Thursday 23 March 12pm – 8pm in-person customer meetings with insurers
Appointments are recommended for the in-person customer meetings with insurers.

To book an in-person meeting go to www.insurancecouncil.com.au/Bookings

Quote attributable to ICA CEO Andrew Hall:

Insurers are always available by phone or online, however we know there’s great value in holding community information sessions and in-person meetings in impacted communities.

We encourage policyholders who have flood-affected properties and would like assistance to meet with their insurer.

Since mid-November more than 13,000 claims at an estimated value of $196 million have been lodged for flood damage in the region.

This includes 6552 home property claims, 4038 home contents claims and 763 motor vehicle claims.

Useful links

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icon Book your appointment

Insurers revisit NNSW flood communities for in-person

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Insurers revisit NNSW flood communities for in-person meetings

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News release

Tuesday, 14 February 2023

The Insurance Council of Australia (ICA) and insurers will hold in-person customer meetings at four locations in northern NSW in March in a continuing effort by the insurance industry to assist policyholders and finalise flood-related claims.  

The one-year-on customer meetings are an opportunity for policyholders who lodged claims after last year’s devastating severe weather to discuss any part of their claim with their insurer.  

Insurers are always available by phone or web; however, many people prefer to discuss their claim in-person.  

Customer meetings will be held from midday to 8pm on: 

  • Monday 6 March at Lismore Workers Sports Club 202 Oliver Ave, Goonellabah 
  • Tuesday 7 March at Mullumbimby Golf Club 600 Coolamon Scenic Drv, Mullumbimby 
  • Wednesday 8 March at Casino RSM 162 Canterbury St, Casino 
  • Thursday 9 March at Ballina RSL 1 Grant St, Ballina 

Appointments are essential. To book go to insurancecouncil.com.au/bookings

South-east Queensland customer meetings will commence in four locations on Monday 20 to 23 February at North Brisbane (Geebung), Sunshine Coast (Maroochydore), South Brisbane (Coorparoo) and Caboolture. 

Quote attributable to ICA CEO Andrew Hall:     

The estimated insurance cost of this event is $5.7 billion, making it Australia’s most costly natural disaster.  

Insurers are assisting their customers by finalising assessments, repairs and rebuilds and completing claims, with 78 percent of the more than 239,000 claims now closed. 

As the one-year mark approaches insurers are once again undertaking in-person consultations.  

This will be the industry’s fourth visit to some locations and each time the ICA and insurers return for these in-person meetings we help people navigate the claim process and their recovery.  

Useful links

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We acknowledge the Traditional Owners on the many lands the people of the ICA reside and work. We respect and honour Aboriginal and Torres Strait Islanders Elders past, present, and emerging.
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