Flood losses reach $5.45 billion, over half claims closed: ICA

Insured losses from Australia’s costliest ever flood have reached $5.45 billion from around 234,000 claims, the Insurance Council of Australia (ICA) said today.

The new estimate for the catastrophe, which devasted northern NSW and Queensland in the early months of 2022, creeps toward the $5.57 billion insured-loss bill from the 1999 Sydney hailstorm which for two decades has held the title of most expensive Australian catastrophe in normalised terms.

Earlier this month, Zurich-based data firm Perils upped its insured loss estimate for the floods to $6.3 billion. That calculation, which is based on slightly different dates, is the largest insured catastrophe loss event experienced in Australia.

ICA says 54% of all the claims are now finalised.

CEO Andrew Hall says insurers have been working hard to settle claims and “remain concerned” after the Bureau of Meteorology declared Australia has entered a third consecutive La Nina weather event, increasing the likelihood of floods this spring and summer.

“Insurers are geared up and working through the current claims as quickly as possible,” Mr Hall said. “We are confident this momentum will continue leading into summer.”

Claims closure times are being impacted by the high volume and a shortage of experts, builders and materials, ICA says, as well as the complexity of government recovery programs. The ICA wants Queensland, NSW and the Federal Government to expedite build-back and buy-back programs.

“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,” Mr Hall said.

Research from the McKell Institute recently found the cost of extreme weather events to Australian households is expected to jump to an average of more than $2500 a year by 2050.

ICA’s annual Insurance Catastrophe Resilience Report said the February ‘rain bomb’ first struck Maryborough in Queensland and slowly travelled south to Sydney, impacting more than 70 local government areas. The two states were continually battered by rain throughout the next few months.

Brisbane received 80% of its annual rainfall in just a few days, rivers burst their banks and hundreds were evacuated in Lismore. The floods also caused chaos in Sydney, and 22 died.

The ICA has previously said the average flood claim is $22,000, with personal claims averaging $17,000 and commercial claims $71,000, and both the number and value of claims is evenly split between the two states.