Flood claims top 60,000 as fears grow over materials, labour shortages
More than 60,000 claims have been received by insurers as a result of the flood catastrophe in Queensland and NSW, and concerns are rising about the impact of materials and labour shortages on the recovery.
Covid-induced supply chain issues had already been stretching claims timelines, and the current catastrophe – which is still far from over – is expected to dramatically worsen the situation.
The Insurance Council of Australia (ICA) says it has flagged “the impact of labour constraints and materials shortages on the rebuild and recovery process” with government stakeholders.
“The current flooding comes off the back of a period of consistently high claims because of ongoing summer storm activity, and impacts from the pandemic on labour and materials availability and building costs,” ICA said today.
Claims management firm Crawford says “there is no doubt” the floods will compound issues around the cost and availability of materials.
“Unfortunately, though, there is no magic fix to this challenge,” Head of Crawford’s managed building repair service Contractor Connection Tim Butler said.
“The building industry has experienced huge shortages of materials over the past six to 12 months. So yes, while there will be longer than usual wait times to restore and rebuild, everyone is in the same situation – it’s an industry wide challenge we are facing together.
“One thing I do know is that we will do the very best we can, as fast as we can, under the current circumstances.
“Supply and demand challenges mean that when things are in short supply, then the cost of them inevitably goes up because everyone wants to get their hands on those materials.
“I think it’s going to be very important that the industry as a whole is managing the expectations of policyholders in terms of wait times.”
Gallagher Head of Claims Adam Squire told insuranceNEWS.com.au the industry is entering a challenging period.
“We went into this in a position where there were supply chain issues. This is not going to be great.
“What we’re trying to do is work with clients to manage expectations, to say there is a chance that there will be delays for building materials.
“And there were already claims personnel shortages across the industry. Often you’d have had people coming into the country on visas to supplement claims teams. We haven’t had that for two years of course.
“But we’re well set up and ready to go. We’ve got a great team of people that are working a lot of hours and I’m pretty proud of them.”
The current claims tally of 60,163 is a 25% rise from yesterday, with 46,235 claims from Queensland and 13,928 from NSW. Some 83% of claims relate to property, and the rest motor vehicles.
ICA for the first time put an estimated dollar value on the disaster, saying based on previous events the current cost of claims is likely to be about $900 million.
S&P Global Ratings said yesterday that insured losses could eventually rise above $2 billion.
The Bureau of Meteorology today issued severe weather warnings for large areas of NSW. Multiple major flood warnings were in place for the Hawkesbury, Nepean, Georges, Richmond, Clarence and Weir rivers, plus Tuggerah Lake.
And there was also a warning for very dangerous thunderstorms across southeast Queensland, with residents of Brisbane told that flooding there may get worse again.
“This is an ongoing and severe weather event, so it is still too early to predict where it will end,” ICA CEO Andrew Hall said.
“These severe weather systems have been impacting the East Coast now for more than a week and are still very active across all regions.
“Despite that, insurers are working closely with Local, State and Federal Governments to ensure that insurers are fully coordinated in the recovery process that is starting to commence in communities up and down the coast.”
