Australia's costliest flood: Update on claims closed

Australia's costliest flood: Update on claims closed | Insurance Business Australia

Australia's costliest flood: Update on claims closed

Insurers have closed more than half of the insurance claims related to the catastrophic flooding in Queensland and New South Wales (NSW) in February and March 2022, according to the Insurance Council of Australia (ICA).

The latest figure is a 10% increase from the claims closed last month, with $2.81 billion or 54% of all claims now finalised for customers affected by Australia's costliest flood.

The ICA explained that the time required to settle or resolve a claim depends on the type of claim, assessment and analysis required to make a claim decision, and the complexity of the repair or settlement. Therefore, the more complex the analysis, assessment, and rebuild required, the longer a claim will take to close.

Furthermore, claim closure times may have been impacted by the high number of claims, a shortage of experts assessing and managing flood claims, building labour and material constraints, and the complexity of recovery and resilience programs delivered by the Queensland and NSW governments.

Read more: ICA urges Australians to prepare for La Nina

According to the ICA, insured losses increased slightly from last month to $5.45 billion from around 234,000 claims.

ICA CEO Andrew Hall said insurers are prioritising settling claims following the devastating flooding in Queensland and NSW early this year, and he is confident this momentum will continue leading into summer. However, as experts forecast a continuation of La Nina conditions, Hall had encouraged the Queensland, NSW, and federal governments to continue expediting their build-back and buy-back programs as soon as possible.

“Our recent reports and research show that these events are becoming increasingly costly for Australian households and clearly demonstrate the impact of worsening extreme weather,” he said. “To ensure Australians continue to have access to affordable insurance protection, we must increase investment in the resilience of our built and natural environments and, in parallel, address the underlying cause of more severe weather events.”