Australia's summer catastrophes – how much did they cost the insurance industry?

Insurers ramp up recovery efforts

Australia's summer catastrophes – how much did they cost the insurance industry?

Catastrophe & Flood

By Roxanne Libatique

The Insurance Council of Australia (ICA) has revealed that insurance losses from the summer’s catastrophes have surged to $1.2 billion.

The includes the significant impact from ex-Tropical Cyclone Jasper, which affected the stretch from Cape York Peninsula to Townsville from December 10 to 16. The Christmas and New Year storms from December 23 to January 3, spanning Queensland, New South Wales, and Victoria, compounded the insurance losses.

Insurance losses from summer storms

According to the ICA, insured damages from the festive season storms alone have escalated to $968 million, with close to 90,000 claims filed.

Last month saw an addition of over 18,000 claims, highlighting the delay for many in initiating the insurance claim process. Currently, 28% of these claims have been resolved, with payouts to affected customers amounting to $171 million, a marked increase from the $22 million paid in January.

Despite extensive damage across three states, the average claim cost has been below $10,000, lower than similar incidents in the past. On the other hand, insured losses from ex-Tropical Cyclone Jasper stand at $278 million from nearly 10,000 claims, with an average claim cost of about $28,000, signifying the severe damage and the complexity of the claims. So far, 21% of these claims have been finalised, with $62 million compensated to policyholders.

Insurers’ response summer extreme weather events

The insurance industry has actively engaged in the impacted areas, conducting community consultations, forums, and offering direct claims assistance.

Additional information on losses from the Valentine’s Day storms in Victoria, which the ICA declared a significant event, is currently being compiled and is expected to be announced soon.

ICA CEO Andrew Hall provided insight into the situation, noting the significant effects of the weather events and the industry’s commitment to addressing claims and facilitating repair efforts.

“While recovery takes time, we anticipate rebuilding efforts to commence soon if it has not already, allowing people to safely return to their homes,” he said. “We understand the frustration this process can cause, but thorough assessments and proper repairs are crucial for long-term recovery.

“Claims will remain open until all works are completed and approved, which may take some time depending on the severity of the damage caused and the complexity of the claim.”

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