Report highlights flood response failings

AILA President's message – Melanie Quixley

By the time you read this, it’s likely the country has been hit by severe weather if the early predictions from the Bureau of Meteorology were correct.

It’s hard to fathom how much more volatile the weather could be after the events that have devastated communities across Australia in recent years.

In 2022, floods impacted communities across Australia and led to more than 300,000 insurance claims being lodged – more than for any other natural disasters in Australia’s history.

In 2023-24, Australia experienced catastrophic weather events that collectively led to almost 157,000 claims and $2.2 billion in insured losses (Insurance Catastrophe Resilient Report 2023-24).

The release of the Flood failure to future fairness report in October shows there’s much work to be done in the insurance industry’s handling of such disasters.

The parliamentary floods inquiry made 86 recommendations including strengthening regulation and the industry code of practice, which “will result in better outcomes for consumers – and, in particular, for vulnerable consumers and households at high risk of flood”.

The report comes from the inquiry into insurers’ responses to major flood claims after the 2022 floods. It examined the three “P” s of flood insurance – policy holders, pooling and preparation.

It stated, “the recommendations will lead to better claims management, more transparent reporting of insurer performance, lower premiums for households exposes to a high risk of flooding and improved long-term strategies for preparation and resilience”.

The outcomes of the report echo the sentiments expressed by industry experts at our National Conference in early October, before the release of the report.

It was clear then that the insurance industry was taking a good hard look at itself and becoming increasingly proactive to ensure it can provide customers with the support and service they need when disaster strikes.

There is little doubt that the best way to reduce premiums is to reduce the underlying risk and the report’s recommendation for greater government investment in mitigation and resilience speaks to that.

Many insurers are already well advanced in adopting improved practices since 2022 and as climate volatility increases, insurers will need to remain at the forefront of understanding and managing climate risk and customer expectations.  

As 2024 comes to a close, it is opportune to reflect on the enormous amount of work involved in producing the AILA educational program each year, and to thank our dedicated volunteers at State and National level.  Thank you to our members, friends and sponsors for your ongoing support throughout 2024. Have a safe and happy festive season!