When Australian insurers report a rough quarter, the culprit is almost always the same: a cyclone, a flood, a hailstorm that swept through a densely populated city. Natural catastrophes remain the dominant driver of home insurance losses and that is unlikely to change. But a separate set of risks is quietly building - and for brokers advising clients on home insurance, they are increasingly worth a conversation.
Scott Guse (pictured), a partner at KPMG with deep expertise in the insurance sector, frames it plainly. "There's a whole raft of other events continuing to escalate," he said. Three in particular are drawing sustained attention from insurers: failing flexi hoses, homes built dangerously close together and the accelerant effect of batteries on household fires.
The most widespread of the three is also the most overlooked. Flexible hoses - the braided connectors linking taps to water supplies in kitchens and bathrooms - were installed in enormous numbers during Australia's building boom of the late 1990s and early 2000s. They were designed to last around 15 years. That warranty period has well and truly expired.
"Most of those were installed in new houses about 25 years ago and really only have a lifespan of 15 years," Guse says. "So you're starting to see a number of them burst, and when they do, water just runs and floods your kitchen or bathroom."
The damage from a burst flexi hose can be extensive - waterlogged cabinetry, flooring, walls and ceilings - and insurers are increasingly alert to the maintenance question. Where a hose shows visible signs of age, rust or swelling, claims can and do get denied. Guse's advice is unambiguous: "Get your flexi hoses checked, because a burst can cause a hell of a lot of disruption and damage." For brokers, that message is worth passing to clients at renewal time.
The second emerging claims driver sits at the intersection of insurance risk and national housing policy. The federal government's ambition to build more than one million new homes over five years has renewed focus on medium and high-density development - and with that comes a structural risk that the industry is beginning to quantify.
Australia is a vast country, yet new suburban developments increasingly pack homes onto narrow lots, with minimal separation between structures. It is a planning model more familiar to the inner suburbs of European cities than to a continent with land to spare - and it is creating a meaningful fire risk. "You're also finding houses built closer and closer together, such that when a fire happens it can very easily jump from one house to the next," Guse notes.
That observation is no longer theoretical. "We've seen a more noticeable increase in fires jumping from one house to the next due to close proximity," he said. Individual insurers hold the granular claims data, and the Insurance Council of Australia has not published specific figures, but the directional trend is clear to those inside the industry.
Compounding that proximity risk is the third factor: batteries. Electric vehicles, e-bikes, solar storage systems and consumer electronics have flooded Australian homes with lithium-ion cells, and fire investigators are increasingly familiar with their behaviour. "There are a lot more batteries in homes now - while they don't self-combust immediately, they accelerate fires and make them worse," Guse said. A fire that might once have been contained to one room - or one property - now spreads faster and burns hotter.
Guse is measured about the overall scale: "I'd say it's a noticeable increase rather than a dramatic one. But it is observable, and insurers have tried to be on the front foot about communicating it." That communication is largely running through media channels and renewal notices, with some insurers including explicit guidance on flexi hose checks alongside policy documents.
For brokers, these three trends suggest that the next claim may not come from a weather driven event. It may come from under the kitchen sink, from next door, or from a battery left charging overnight.
