Friday 18 October 2024

The Insurance Council of Australia (ICA) today welcomed the the House of Representatives Standing Committee on Economics’ report following its inquiry into insurers’ responses to 2022 major floods claims.

The report provides 86 recommendations aimed at further improving the insurance industry’s response to natural disasters and enhancing consumer protections.

The ICA strongly supports those recommendations which would put downward pressure on premiums and help safeguard communities from future extreme weather events.

These include the removal of state insurance taxes, ongoing government investment in resilience and mitigation, and changes to planning arrangements to stop development on floodplains.

While they were small in proportion to the more than 300,000 flood claims received in 2022, the report includes too many examples of customers who did not receive appropriate service or even felt traumatised by their interactions with their insurer.

Insurers have apologised to those customers that were let down and have recommitted to ensuring service standards are improved through greater investment in people, tools and training.

The ICA commissioned its own report into the largest of the 2022 floods from Deloitte, and a follow-up progress report will be released by the end of this year.

The industry has already made progress towards many of the recommendations contained in the Committee’s report, including work on development of a potential standardised maintenance and a wear and tear clause, and better identification and handling of vulnerable customers.

Over the coming months, the ICA will review and engage with its members on the report’s recommendations, alongside the recommendations of the independent Review of the General Insurance Code of Practice.

The ICA and insurers are committed to continuing to work closely with Australian governments, stakeholders, consumer representatives, and regulators to implement changes that improve the industry’s response to customers impacted by extreme weather events.

Quote attributable to ICA CEO Andrew Hall:

The four flood events across 2022 were unprecedented and saw more than 305,000 claims and $7.7 billion in incurred losses, including $6.3 billion incurred from just one event.

Insurers acknowledge there were failures of systems, processes and resourcing in response to the extreme weather events that occurred during 2022, and the industry is already taking action to address these challenges.

The ICA and its members thank the Committee, particularly its Chair Dr Daniel Mulino MP, for their work inquiring into this important issue and we look forward to continuing to collaborate with the Government, Opposition and other stakeholders on the report’s recommendations.

Getting the balance right between good customer outcomes without putting further pressure on premiums will be key to successful implementation.

Monday 14 October 2024

With summer fast approaching, the Insurance Council of Australia (ICA) is urging homeowners and tenants to prepare for the upcoming storm and bushfire season. 

Extreme weather can strike at any time, however insurers see a greater number of events between October and April. Since 2013, 78 per cent of all declared insurance catastrophes have taken place between October and April and 90 per cent of catastrophe-related losses have been incurred in those months.  

The Bureau of Meterology is already predicting increased risk this summer, with higher fire risk predicted for parts of Vicrtoria South Australia because of the lower than average rainfall through winter, greater risk of storm and flash flooding across large parts of Australia's east coast, and above average risk of severe cyclones in the north because of warmer sea temperatures. 

Before extreme weather season arrives, there are practical actions that all householders can take to prepare for and reduce the risk of extreme weather. These include: 

• Inspect your property and take practical steps to reduce risk such as cleaning gutters, keeping lawns and gardens maintained and cleaning up green waste items around the property. Take the advice of relevant agencies in your area when preparing your home for summer weather conditions.  

• Prepare a room-by-room inventory of the contents of your home. This list helps determine if your assets are adequately protected and can save time when making a claim.  

• Use an online building and contents calculator to ensure your insurance cover adequately covers estimated costs to repair, rebuild or replace home and contents, vehicles and any outbuildings on your property in event of a disaster.  

• Review all building, contents, and landlord insurance policies. Make sure you understand what cover you have, as well as any exclusions or limits that may be part of your insurance policy. It is important to be aware of these exclusions and to query your insurer about any part of a policy you do not understand.  

• Ensure you are covered now before extreme weather threats are heightened, as some insurers may place a temporary embargo on the purchase of new policies if extreme weather is imminent. 

Quotes attributable to ICA CEO Andrew Hall:  

We’ve already seen an early start to storm season, with flooding in parts of Victoria and Tasmania last month and storms in south-east Queensland last week. 

Storm season is unpredictable and in Australia extreme weather can strike any place and at any time. That’s why it’s vital to be prepared and ensure your insurance cover is up-to-date. 

The costs of home repairs and rebuilding hs risen by 27 per cent since 2020, making it vital that property owners know that their sum insured is adequate. 

We also recommend consulting your local state emergency service for safety tips, and to keep informed via resources available from fire and emergency services agencies.