The rain continues across Australia’s east coast as towns experience more flooding and thousands of residents face the grim reality of evacuating their homes. One flashpoint is the Victorian town of Echuca where the river level has risen to 95 metres above sea level, surpassing a century old record. In northern NSW, Narrabri and Moree are also experiencing serious flooding.
Insurers, already dealing with tens of thousands of claims, can expect many thousands more. Andrew Hall, CEO of the Insurance Council of Australia (ICA), has said the insurance system is dealing with an “absolute avalanche.”
“I can’t fault the ICA’s description,” said Faramarz Ostowari (pictured above), head of corporate insurance and risk solutions (CIRS) claims for Honan Insurance. “It certainly has been an avalanche.”
Particularly after the flooding in February and March across Queensland and New South Wales, the Sydney based claims expert said he saw a “huge uptick” that “effectively doubled the number of claims we suddenly had to deal with.”
In response, Ostowari’s claims team called on the firm’s brokers to lodge claims from customers and hired a couple of temps to help work through the overload.
“The crew, I’m really proud to say, were working pretty much night and day on behalf of the clients in order to have those claims lodged and then following up with insurers pressing them to act, especially on some of the urgent matters where people affected were just left homeless,” he said.
As a result, said Ostowari, Honan was better prepared for the widespread flooding this month. However, the scale of the repeated inundations this year is like nothing he’s experienced before.
“It’s absolutely unprecedented,” he said. “Previously, we had the Brisbane flood about 10 years ago – that was a significant event but here we’re talking about a much bigger area from Queensland through to New South Wales, so effectively the whole east coast region, including Victoria as well.”
Ostowari said insurers are facing tough challenges, including a limited market of available loss adjusters. There are also delays accessing flooded properties.
“A lot of the time the access is closed off, or underwater, or unsafe or blocked and loss adjusters can’t get out there,” he said.
However, when these professionals are able to reach properties and complete their damage reports, customers still have a long time to wait.
“That’s [the loss adjuster’s report] not what gets the property owners back to where they should be,” said Ostowari. “It’s actually getting the tradespeople in to give quotes and to approve those quotes - and again, tradespeople are limited.”
He said even before the last few years when disasters like fires and floods have rolled out in increasing numbers, there were already difficulties finding tradespeople to perform the repair work.
New technologies also promise to speed the claims process in a flood situation, including drones taking photos or virtual sessions with customers who can show damage to a loss adjuster over a Zoom style video link. However, Ostowari said these technologies are still in their infancy and suggested they are not yet making much difference to his customers.
He said helping people in these situations will always need to be a combination of personal reassurance and, where possible, use of technology to speed things along.
“That’s where we’re all developing as an industry so we can deal with these sorts of catastrophes that we’re constantly going to be facing,” he said.
In a recent interview with Insurance Business, Neil Luddington, Hobart based account manager with Roberts Insurance Providers, also said authority issues were delaying claims processing for his customers in Tasmania.
Tasmania-based staff for the big insurers, he said, can lack the authority to approve claims. Instead, final claims approval comes from offices based on the mainland.
“We don’t have authority here,” he said. “In terms of getting claims process done and payments to our clients, it’s slightly frustrating.”
Tasmania was one of three Australian states where flooding prompted the ICA to declare an Insurance Catastrophe.
“This has been the largest flood event in Australia’s history,” said Hall to ABC News during a visit to Tasmania earlier this month. “The system is at peak capacity, we ask people to be patient, we’ll work through these claims as quickly as possible.”
The ICA’s catastrophe data shows that insurers have paid out more than $5.4 billion in claims damages for the February and March floods. For those floods there are still more than 100,000 outstanding claims.
