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.
Fire
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.
Insurance Catastrophe Resilience Report: 2020 – 21
New insurance report calls for national border approach
New insurance report calls for national border approach
News release
Wednesday, 8 September 2021
A new report published today by the Insurance Council of Australia (ICA) says Australians impacted by natural disasters this spring and summer are likely to face delays to repairs and rebuilds unless a national approach is agreed to allow essential recovery workers to cross state borders.
Natural disasters usually result in a surge of claims beyond the capacity of local workforces and the limited access to interstate trades due to Covid-19 restrictions and border closures is causing significant challenges for insurers and their customers.
The call for a national approach for the movement of essential recovery personnel across state borders is one of six policy changes the ICA is calling for to lessen the impact of future natural disasters, contained in the Insurance Catastrophe Resilience Report: 2020-21.
The Report provides a data-driven overview across five events declared Insurance Catastrophes by the ICA between October 2020 and June 2021, which included south-east Queensland’s Halloween hailstorm, the NSW storms and flooding in March, and a tropical cyclone in Western Australia.
The Report also provides an update on community recovery from the Black Summer of 2019-20, which resulted in insurer payouts of almost $5.5 billion across four natural disasters including the devastating bushfires.
To better protect Australians from the impacts of future natural disasters, the ICA is calling on state and federal governments to urgently act in six policy areas:
- Investing more in resilience, particularly at a state level
- Improve building quality and standards to provide greater protection from extreme weather events
- Better land use planning to ensure no more homes are built in harms’ way
- Removing state taxes on insurance to improve the level and extent of cover
- A national approach to the movement of essential recovery personnel across state borders
- Coordinated disaster clean-up after an event to allow rebuilding and recovery to commence as soon as possible
The Insurance Catastrophe Resilience Report will be produced annually to provide an update on recent natural disasters. The 2020-21 edition is available at insurancecouncil.com.au
Comment attributable to Andrew Hall, CEO Insurance Council of Australia:
The Insurance Catastrophe Resilience Report sets out in clear terms the impact of natural disasters on individuals and communities. Since October 2020 there have been five declared Insurance Catastrophes which have given rise to 134,000 claims totaling almost $2.3 billion.
But as if fire, flood, storm, cyclone, and hail was not enough, many thousands have had to recover from these events under strict arrangements put in place in response to Covid-19.
Insurers are seeking a better streamlined process to facilitate border restrictions to enable us to move claims assessors, disaster recovery specialists, builders and tradies in a Covid-safe way between and within states and territories to undertake essential repairs and rebuilds.
We appreciate the need for restrictions to mitigate health risks, however these must be balanced against the needs of those requiring urgent repairs to their properties that will enable them to pick up their lives and move on. Families can’t wait weeks for State authorities to consider exemptions to be processed to get extra help to impacted communities.
Building occupant safety linked to building fire protection checks
Building occupant safety linked to building fire protection checks
News release
Friday, 27 August 2021
The Insurance Council of Australia (ICA) and the National Fire Industry Association (NFIA) are joining forces to remind building owners and managers to ensure they are staying up to date with fire protection safety and maintenance checks for commercial, industrial, and residential buildings.
Fire protection work has been recognised in each State as essential work that must continue even under current restrictions.
The upheaval of the past 18 months and recent lockdowns have made access to buildings by fire protection professionals more difficult because of social distancing requirements and government restrictions.
However, building owners and managers should ensure fire protection safety and maintenance checks are up to date to ensure occupants’ safety and the integrity of their premises.
Quote attributable to NFIA CEO Glen Chatterton:
Regular checks for fire protection safety and maintenance are essential to ensuring the safety of occupants and the asset of the owner, but we know from talking to our members that these programs have unfortunately been disrupted because of Covid lockdowns and restrictions.
By failing to undertake legally required regular inspections, testing and maintenance, business or property owners could be open to hefty financial risk, fines, safety breaches and litigation.
We’re asking building owners and managers to accommodate fire inspection professionals to allow them to carry out their essential safety checks and repairs to protect the building and its occupants in case of fire.
Quotes attributable to ICA CEO Andrew Hall:
Regular and current fire protection inspections are an essential component of building occupant and building infrastructure safety.
Building fire safety maintenance checks by way of inspection and testing are a requirement of many commercial and strata-title building insurance policies, and failure to conduct routine fire protection safety maintenance may affect insurance coverage.
People that live, work, or visit a building expect it to be safe, but this can only be assured if fire protection professionals are able to regularly inspect, test and certify fire related safety equipment which are important components of a building’s risk assessment.
NSW bushfire funding welcome, but insurance taxes remain
NSW bushfire funding welcome, but insurance taxes remain
News release
Thursday, 20 May 2021
The Insurance Council of Australia (ICA) has welcomed additional funding of $268 million in the New South Wales State Budget to continue implementation of the recommendations of the NSW Independent Bushfire Inquiry, but said the failure to address insurance taxes meant many homeowners would remain without adequate cover of their most important asset.
The $268 million to be expended in the 2021-22 Budget is part of a $460 million package begun last year. Since the devastating 2019-20 bushfires insurers have paid out in excess of $5.6 billion in claims related to natural disasters in New South Wales.
While the quantum to be spent on mitigation against future natural disasters is not known at this point, the ICA welcomes the increased investment which adds to significant support contained in the recent Federal and Victorian budgets.
This new funding is tempered, however, by the failure of the New South Wales Government to reform state insurance taxes which remain the highest in the country.
In addition to imposing stamp duty on every policy purchase or renewal, New South Wales is the only mainland state that taxes insurance policyholders to fund fire and emergency services and policyholders pay almost three times more in state insurance taxes than Victorians (see table).
The ABS Household Expenditure Survey showed that the Victorian rate of household non-insurance is seven per cent compared to 13 per cent of households non-insured in NSW.
Quote attributable to ICA CEO Andrew Hall:
Insurers have been calling for some time for this scale of investment in resilience and mitigation measures, and it’s good to see the New South Wales Government has heard those calls.
More resilient communities, businesses, and households mean less disruption to life and faster recovery after a major natural disaster.
However, the effectiveness of this new investment is lessened by the failure to reform taxes and levies on insurance in New South Wales, which remain the highest in the country.
Stamp duty on insurance is a retrograde revenue measure that numerous inquiries and reviews have found leads to household underinsurance or non-insurance.
The Treasurer should seize the opportunity afforded by his proposed changes to property taxes to remove these taxes which are barriers to appropriate levels of insurance cover for New South Wales households and businesses.
Premium Cost | ESL (State) | GST | Stamp Duty (State) | Total | Total State Taxes | Total | |
NSW | 1000 | 180 | 118 | 116.82 | 1414.82 | 296.82 | 414.82 |
Victoria | 1000 | - | 100 | 110 | 1210 | 110 | 210 |
