14 October, 2023
Flood insurance inquiry
The federal government have released details of the inquiry into the response of the insurance industry to the major flooding events across Australia in 2022.
The House Standing Committee on Economics will lead the inquiry which will take on a “whole-of-economy” view of the ongoing challenges caused by the intense and frequent flood events. Flooding occurred across large swathes of the state last year and communities across the central west of NSW were greatly affected particularly during November and December 2022. The resulting insurance cost has been staggering with insurance companies paying out billions of dollars in claims. However, there have been immense difficulties in getting financial and practical support as well as health and wellbeing support to families and individuals who are flood victims.
When the government first signaled its intention to an inquiry into the response of the industry, the Insurance Council of Australia (ICA) welcomed the move. In July of this year the council reported that the flood events in 2022 across south-east Queensland in Feb-March, Hawkesbury-Nepean in July and the Central West in November had so far cost “7.17 billion in insure losses from more than 300,000 claims.”
In total across all categories, there was insured losses of $36.5 billion from five million claims, with approximately one quarter of adult Australians made an insurance claim according to data from the ICA. Andrew Hall the CEO of ICA said in July that “any review that supports the ability of insurers to improve how they carry out their crucial function is welcome, and we look forward to participating”.
The 2022 floods were some of the costliest disasters for insurance companies in the nation’s history. The inquiry will be chaired by Daniel Mulino MP who also chairs the Standing Committee on Economics.
The inquiry will focus on a range of issues, including:
- Timeframes for resolving claims.
- Obstacles to resolving claims.
- Communication with people lodging claims.
- The effectiveness of internal dispute resolution processes.
- The accessibility and affordability of hydrology reports and assessments.
- The affordability of insurance cover; and
- The preparedness of insurance companies for future major floods.
“The aftermath of intense natural disasters continues to have a hue impact on the lives of Australians, in rural and regional communities and in metropolitan areas. My staff are still advocating for affected residents who have outstanding claims from their insurance companies. Meanwhile, they are also trying to rebuild their lives, which is difficult when claims haven’t been settled,” said Mr Mulino.
The inquiry will start with an online survey asking for submissions by the end of October 2023. The committee will deliver its final report by the end of September 2024.