ICA raises insured loss from 2022 Australia floods to $5.81bn

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The Insurance Council of Australia (ICA) has raised its estimate of insured losses from the devastating Eastern Australia floods that occurred over February and March in 2022 to AUD 5.81 billion, based on more than 240,000 claims lodged.

This represents an increase of $160 million over the figure of $5.65 billion that the ICA put forward in November, but still comes some way short of the $6.53 billion estimate from catastrophe loss aggregator PERILS.

Nevertheless, at $5.81 billion the flooding is still the costliest extreme weather event in Australian history, the ICA notes, and was the second costliest insured event in the world in 2022.

Given the scale of the event, the ICA has appointed consultancy and accounting firm Deloitte to undertake an external review into the insurance industry’s response to the flooding in South-East Queensland and Northern New South Wales.

The review will look to identify lessons learned from insurers’ response to the floods – both from good practice and practices requiring improvement – to better prepare and inform the industry’s response to future extreme weather events in a changing climate.

Insurers’ response timeframes, resources deployed, claims handling, complaints handling, communication with policyholders, and engagement with stakeholders will all be examined as part of the review.

The review will also examine the impact of regulatory requirements, insurers’ interactions with government agencies and their programs and policies, and broader external pressures including supply chain and labour constraints.

“As the costliest extreme weather event in Australian history, last year’s floods created significant challenges for the insurance industry in addressing the extraordinary volume of claims across a very wide geographic area,” said ICA CEO Andrew Hall.

“Following three years of La Niña conditions and the COVID-19 pandemic, these floods tested the systems insurers use to respond to customers and raised issues such as a shortage of expert assessors, building labour and materials constraints, and the complexity of recovery and resilience programs delivered by state governments,” Hall continued.

“With more than 83 per cent of claims now closed, insurers have agreed it is timely to review the industry’s response to identify best practice and what could be improved when responding to future extreme weather events”

The ICA’s says its review will involve analysis of insurers’ claims and complaints data and include a consultation process with relevant stakeholders, including affected local governments, elected representatives, the Australian Financial Complaints Authority and other regulators, and consumer representatives.

The post ICA raises insured loss from 2022 Australia floods to $5.81bn appeared first on ReinsuranceNe.ws.

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