Monday, 14 August 2023

The Insurance Council of Australia (ICA) today welcomed two new reports from the Actuaries Institute which identify the impact of extreme weather to help make better decisions to enhance the country’s resilience and stabilise insurance premiums. 

The reports, Home Insurance Affordability Update and Funding for Flood Costs: Affordability, Availability and Public Policy Options, explore the events and costs of extreme weather events in 2022 that resulted in almost $7 billion in insured losses. 

Data shows that 2022 was the costliest year on record for Australian insurers, with nearly $6 billion of insured losses alone resulting from the February and March floods in South-East Queensland and Northern New South Wales – the second-costliest extreme weather event for insured losses globally last year. 

The findings amplify the urgency of this issue for governments, and clearly identifies that only government investment and policy intervention to lower risk will help to manage insurance affordability. 

The Actuaries Institute reports recommend measures such as ongoing investment in effective risk reduction initiatives, such as enhancing flood mapping and moving people out of harm’s way, and reforming insurance-based taxes. 

Right now, stamp duty and other state taxes on insurance can add ten to 40 per cent to the cost of a premium depending on the state or territory. NSW is the worst state for insurance taxes, with the additional Emergency Services Levy adding around 18 per cent to home insurance premiums.  

The report echoes call from the Insurance Council to reform land-use planning and strengthen building codes so all new homes are built to withstand the impacts of climate change. 

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

These two reports from the Actuaries Institute are further proof of the urgency of reducing risk for communities exposed to extreme weather through greater government investment and action. 

Insurers understand that people are hurting right now as cost of living pressures weigh heavy on monthly budgets, which is why addressing insurance affordability is a critical issue for our industry. 

State governments in particular can provide immediate relief on insurance costs by reforming their insurance taxes.  

With responsibility for land use planning, state governments must also urgently change our approach to what we build and where we build it so future homeowners are not left stranded without insurance cover. 

Monday, 3 July 2023

The Insurance Council of Australia (ICA) will host in-person customer consultations at Rochester on Monday 24 July to Thursday 27 July, inviting community members from the Campaspe region to meet with their insurer. 

The four-day forum will be the third time the Insurance Council and insurers have visited the region since the October 2022 floods. 

Event details: 

Where: Rochester Shire Hall on Mackay Street 

When: Monday 24 July to Thursday 27 July 

Time: 10am to 6pm 

Booking: To check appointment availability and to book go to insurancecouncil.com.au/Bookings 

New data from the Insurance Council shows the flood event resulted in more than 19,600 claims, costing $663 million in insured losses. 

Rochester was the worst impacted community, making up 10 per cent of the overall claims count but 30 per cent of overall claims costs ($201 million). 

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

These community consultations are an important part of the recovery process for communities as it gives insured customers the opportunity to meet face-to-face with their insurer and talk through their claim. 

The Insurance Council and insurers are aware that a significant number of claims are complex and awaiting expert reports such as engineering and hydrology, which is causing some delays. For this reason, we are making it a priority to be present and available to customers. 

Wednesday, 14 June 2023

The Insurance Council of Australia (ICA) said the decision by the Northern Rivers Reconstruction Corporation to offer 1,100 home buybacks is a once-in-a-generation opportunity to move people out of harm’s way.

Announced as part of the $800 million Resilience Homes Program, an additional 340 homes will either be raised above the flood-line or retrofitted to withstand extreme weather.

The Insurance Council commends the decision to prioritise home buybacks in areas which pose the greatest risk of life – a decision that will help to reduce the impact of floods in Ballina, Byron, Clarence Valley, Kyogle, Lismore, Richmond Valley and the Tweed local government areas.

Last year’s flooding in South-East Queensland and Northern NSW was the biggest insurance event in Australia’s history – resulting in 241,000 claims at a cost of nearly $6 billion.

Since the February / March event, almost $920 million has been paid to communities in the Northern Rivers from 14,660 insurance claims.

The average claim cost for effected homes in the region was around $73,000, which is three times higher than the average claim cost for the event as a whole ($22,800), demonstrating the particular impact on the Northern Rivers.

The Insurance Council is urging all governments to re-think land use planning for communities impacted by extreme weather risk.

As a result of historically poor planning decisions, moving people permanently out of harm’s way will remain an important tool for governments.

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

This announcement is a historic step for the Northern Rivers in seeing community resilience improved and will make a real difference in protecting those homeowners exposed to flood risk.

Managing and reducing risk in communities most exposed to flood risk is critical, and we must continue to make tough and bold decisions to move people permanently out of harm’s way and see greater investment in strengthening resilience across communities.

The scale and impact of last year’s flood will never be forgotten, so we must use this as a lesson and set a new precedent for how quickly governments can respond in making decisions to benefit communities.