Following the flames

Following the flames

How insurance specialists have swung into action in bushfire-stricken areas with a co-ordinated response program

By Wendy Pugh

Bushfires are as fickle as they are ferocious. Insurance specialists driving countless kilometres through bushfire-hit regions this summer have been amazed by the sheer extent of a razed landscape and the sometimes-random damage caused by fast-moving flames.

“You would have a street of houses where there’s six properties, and five are burned to the ground while there’s one in the middle that doesn’t even have a scorch mark on it,” Suncorp National Event Assessing Advisor Jonathan Robson tells Insurance News.

Residents have returned to properties not knowing if their home has been destroyed or has been one of those left largely unscathed. Other residents stayed to defend properties with varying results as wind-driven fires raced through dry forests and bushland.

“You will have a customer that says ‘there are people worse off than me’, and you are looking at a pile of ash,” Mr Robson says. “It really puts into perspective the resilience that people have.

“There was one couple who had been taken away on a boat out of Lake Conjola [south of Jervis Bay in New South Wales]. He dropped off his wife and jumped back in the boat and tried to save their house. Unfortunately, he wasn’t able to do so.”

AFAC, the national council for fire, emergency services and land management, estimates bushfires have burned almost 12 million hectares this season, compared to the 2009 Black Saturday disaster which covered less than half a million hectares. The Victorian disaster caused the loss of 173 lives, while 33 people have died this season.

Insurance Council of Australia (ICA) bushfire catastrophe declarations have covered Queensland, NSW, South Australia and Victoria, and estimated insurance losses since September total around $1.9 billion.

Insurance personnel have travelled through stark and blackened landscapes as soon as its safe to enter, assessing property damage, assisting with claims and listening to people’s stories of loss and survival.

IAG Major Events Specialist Terry Cheng drove the area from Port Macquarie to Foster earlier in the bushfire season, before more recently travelling through the NSW South Coast region and into East Gippsland.

“It is such a widespread area,” he says. “Driving through on the highway and seeing the trees and the forest areas, and the impact on a large number of towns and small communities…it’s quite sobering.”

Insurers are increasingly aiming to be on the ground as soon as possible after major events and provide training for staff on the scenarios they can expect and how to respond with empathy and in situations of customer vulnerability.

IAG Executive Manager Major Events Craig Byfield says being at the scene to listen to people’s experiences and understand their requirements has been greatly appreciated by policyholders. The insurer is boosting its fleet of major event rapid response vehicles, which this season stopped in towns devastated by the fires.

In Cobargo in NSW, he met an elderly couple who had stayed to defend their home as the bushfire approached. “They had defended their own property and they talked about their experience of working together to save their house,” Mr Byfield tells Insurance News.

“They lost a shed on the property and things like that, but for them to be able to tell their story and have people sit down and listen was an asset to them. I see that a lot in the communities when we visit.”

Insurers have been able to quickly mobilise emergency payments and resources on the spot after meeting customers, making an immediate difference, particularly in more remote areas.

“For us to get out there and actually organise generators and different things like that is vital for our customers for them to be able to remain on their property,” Mr Byfield says. “A lot of them have livestock and will remain there with their animals to be able to support and feed them. That is the sort of thing we see when we are out there.”

Access to disaster areas has been hampered by poor communications, blocked roads and smouldering fires that may suddenly flare up. The insurance industry liaises with emergency services and government authorities before trying to enter an affected region.

In the case of Mallacoota, in Victoria’s east, a team led by the ICA and including representatives from Suncorp, IAG and loss adjuster Crawford & Co was airlifted into the town on a Royal Australian Air Force C-27 Spartan transport plane to start damage assessments before roads to the town were opened.

Flames threatened to engulf Mallacoota on New Year’s Eve, and the town became isolated as the Princes Highway was blocked in both directions. Holidaymakers and residents were evacuated by sea on a Royal Australian Navy ship and supplies were flown in by military aircraft.

ICA says 110 total-loss properties were assessed in less than a day by the team that flew in, using new experimental software that allows rapid collection of the data needed to verify total losses. After positive feedback, ICA will explore a co-ordinated protocol to provide a rapid assessment capability in future when access to communities is difficult.

Mr Robson, one of the participants, says the group divided up to assess properties in the worst-affected areas after a quick reconnaissance drive.

“We just went street by street and went through all of the total losses,” he says. “We kept going until the sun went down. We wanted to get to as many as we could.”

The team arrived as the town was still very much in the middle of an emergency situation. Helicopters and other aircraft were flying in and out delivering supplies and anxieties were clear at a community meeting convened by authorities to update residents on the situation.

The experience provided a deeper understanding for the insurance industry participants of what their customers go through when a small community is completely cut off after a disaster, Mr Robson says.

“They had only just got fuel and food deliveries and those things that you need on a day-to-day basis that you might take for granted,” he says. “There was a little bit of tension around when they were going to finally open up the road.”

Pulling together: insurance staff at Mallacoota evacuation centre

Insurance industry support after the Mallacoota disaster included establishing a welcome centre in Melbourne with the assistance of Emergency Management Victoria to help some 1200 residents and holidaymakers evacuated aboard HMAS Choules.

ICA set up “insurance hubs” in numerous towns in Gippsland and southern NSW in January, including Bega, Ulladulla, Batemans Bay, Mallacoota, Cann River and Cobargo.

The hubs operate independently from government so can open as soon as insurers can access a community. They can open in locations that don’t have formal recovery centres. Having a number of insurers gathered at one central point can also make it easier for people who may have multiple claims with different companies.

IAG says it complements participation in the hubs with use of its major event rapid response vehicles, which act as a mobile office for claims and assessing staff. The vehicles have their own power generators and backup satellite communications.

Priorities in the first instance when meeting policyholders include ensuring they are safe and have somewhere to stay, and seeing if they need emergency funds or temporary accommodation. Claims are lodged, building and contents assessed, and people are taken through the claims management and settlement process.

“With the bushfires, there are total losses and large losses, but even being in these centres where our customers have lost power for days and food has been spoiled but their property is OK – for a lot of these customers payments for food spoilage for two or three hundred dollars means the world,” Mr Cheng says.

Insurers say ongoing support and counselling is offered to customers as well as their own company personnel during and after events like this. Sometimes staff are working from locations where representatives from other agencies and charities such as the Red Cross are on hand to provide additional assistance for policyholders.

“Some customers are quite emotional,” Mr Cheng says. “It is the loss of some memories, it might be a multi-generational family home that has been lost, or it is the loss of a business, so customers can be quite upset about the experience.

“But for some, it is an opportunity as well. One couple came up to me in Batemans Bay and thanked us for the speedy settlement of their claim. They had acreage and they were getting on in years and they were able to use that money to downsize.”

Getting into remote areas to assess properties can be difficult even after the all-clear has been given by authorities and roads have reopened. Staff safety is a top priority.

Mr Robson says trees falling across roads are a common problem and may require a visit to be rescheduled, while unexpected changes in conditions may require alternative roads to be found.

“You will find access is not what you thought it was and you will need to find another route. But the community always wants to support us to get in,” Mr Robson says. “If you get a bit lost, you can always pull up at a local property and they are more than happy to give you some additional directions.”

Assessors mostly meet clients at their properties, often with a builder or engineer, he says. The policyholder may prefer not to attend. Those who do have mostly already visited the site and have seen the damage.

MGA Insurance Brokers’ Kelly Commins, who is working in both Bega and in southeast Queensland, says the scale and scope of this year’s catastrophe has been far greater than other events to hit the region, which have included flooding and the Tathra bushfires.

“It is the combination of large losses and large numbers that are really making the difference with this event,” he says. “The impact is through rural properties and also on to the commercial sector with regards to interruption to business and restrictions to access and those sort of things.”

Mr Commins was working from Toowong in Brisbane when the bushfires happened, and liaised with the local team as the situation evolved.

“Areas were being evacuated or on standby, so we were co-ordinating with staff and making sure they were okay,” he says. “It was just a catastrophe all over the place and a fluid environment that was moving all the time.”

Clients have been getting in touch by phone and visiting the office, with claims continuing to come in this month, and brokers have been attending on site with assessors as required.

Mr Commins says insurers, brokers and loss adjusters have pulled together to deal with the major catastrophic events of the summer.

“Everybody is just motivated to deliver a really good result and, working together, those three different parties I think are achieving that,” he says. “We are seeing payments flowing, we are seeing claims being managed extremely well and extremely quickly.”

Events in January have affected the whole of the South Coast region as road closures and evacuation warnings have also hit businesses physically unscathed by the bushfires but which rely on the peak summer trade.

“The authorities did the right thing; there was no food on the shelves, no petrol, no diesel. But it is a huge loss to our community,” Insurance Advisernet Merimbula Managing Director Kristy Martin tells Insurance News. “The profits are gone. A lot of businesses rely on the four weeks over Christmas to keep them going for the rest of the year.”

The insurance industry’s response to this summer’s catastrophes has included large donations to emergency and relief agencies, support for community organisations and other measures to help local groups and those volunteering.

The National Insurance Brokers Association provided a bushfire community support initiative to advise people who wouldn’t normally use a broker but who would welcome assistance with the claim process.

ICA opened an online register to help local tradespeople and builders play a “significant role” in rebuilding their regional communities.

Insurers have learned from previous catastrophes the value of being on the spot quickly and responsive to immediate needs. They review their performance after catastrophes and have stepped up efforts to better understand the best ways to support customers. There is also the sense this time of a united industry approach in responding to catastrophes.

ICA has developed an “Industry Claims Dashboard” for governments and other agencies to use this season. It involves member firms contributing de-identified information around claims activity.

Head of Risk & Operations Karl Sullivan says the data is intended to assist governments in providing targeted support to victims where it is most needed, and is recognition by insurance companies that they are part of a wider recovery effort for Australians after disasters,

That’s never been more evident than on-the-ground this season as recovery processes have started in far-flung communities affected by bushfires that have rolled on for months across the country.

“Our role is so vital in assisting local communities and customers in rebuilding their lives,” Mr Robson says. “There is definitely a sense of accomplishment and a sense of satisfaction in doing what we do.”

Summer of catastrophes

The Insurance Council of Australia has declared six catastrophes this season, starting with the early outbreak of fires in Queensland and NSW in September. Here’s a list of the disasters listed by the value of losses as of February 14.

Bushfires (NSW, Qld, SA, VIC): Losses reached $1.9 billion from 23,362 claims lodged for a catastrophe that rolled on through the summer after it was declared on November 8. At least 2890 buildings have been destroyed in dozens of fires.

January hailstorms: Canberra suffered the majority of damage from hailstorms that also severely affected parts of Melbourne and Sydney. Losses have reached $638 million with more than 69,850 claims received.

Southeast Queensland hailstorm: A severe hailstorm particularly affected the Sunshine Coast region on November 17 leading to 22,000 claims for estimated losses of $166 million.

East coast storms and flooding: Torrential rain fell across southeast Queensland and NSW in early February, with Sydney recording its wettest four-day period since 1990. Losses of $100 million from 21,000 claims were estimated a few days after the catastrophe was declared on February 10.

October bushfires: A severe bushfire affected dwellings in Rappville NSW leading to losses of $19 million.

September bushfires: Up to 70 bushfires across southern Queensland and 70 in NSW, fanned by high winds, led to multiple property losses, with claims valued at $37 million.

Angry summer: this season’s fires left a trail of destruction

Fire season FAQs

The same questions cropped up time and time again as the nation faced up to this horror fire season. Bushfire and Natural Hazards CRC Chief Executive Richard Thornton helps us provide some answers.

Is the current bushfire season unprecedented?

“Unprecedented” is a word that gets thrown around a lot, but is it accurate? Much more land burned in 1974 (more than 100 million hectares), there were larger insured losses in 1983’s Ash Wednesday ($2.5 billion in normalised dollars), and more deaths in 2009’s Black Saturday (173 people killed).

On the flip side, we’ve never seen so much land burned so early in the season, or so much fire damage in Queensland.

Dr Thornton says that “in some ways yes, it has been an extreme season. And what has been different this time to previous fire seasons is the geographical extent of the fires – multiple states affected severely at a similar time, and vast areas of land burned.

“And at various times Brisbane, Sydney, Canberra, Melbourne, Adelaide and many regional areas have had prolonged exposure to smoke, reducing the air quality, affecting health.

“In some parts, particularly in spring, the severity of the fires we saw for that time of the year was unusual.”

Is it caused by climate change?

Your own view on this might be set, depending on which newspaper you read, but the truth is more nuanced. It’s not a yes or no answer.

“Fire seasons are lengthening worldwide, and we know that in Australia our fire seasons are starting earlier and finishing later, with more dangerous fire days occurring earlier in the season than they have previously,” Dr Thornton says.

“Climate change plays a role in this – Australia is now one degree Celsius warmer than average compared to the long-term average, which means that the variability of ‘normal’ events sits on top of that.

“This means our extremes are more extreme – hotter and windier – and when it does rain, it rains more intensely.

“It is extremely difficult to attribute any one bushfire, flood or cyclone to climate change, but climate change is changing our underlying weather conditions.

“We know, for example, that the timeframes are shortening between our very worst fire days. Weather conditions that may have occurred every few decades will now occur more frequently than that.”

Are other weather phenomena more crucial?

It seems like there’s a never-ending stream of ominous acronyms – whether it’s ENSO, IOD or SAM, the wrong set of circumstances can spell disaster for Australia.

An extremely strong positive Indian Ocean Dipole (IOD) combined with a negative Southern Annular Mode (SAM) encouraged this season’s devastating conditions. But notably the El Nino Southern Oscillation (ENSO) remained neutral.

“Traditionally Australia’s very worst fire seasons have occurred in El Nino years, so it is extremely concerning that we’ve had the fires we’ve had this season without the El Nino driver,” Dr Thornton says.

How big a part do arsonists play?

This has been one of the most-debated issues of the fire season. The reality? Arson happens, and it’s a problem we should do everything possible to prevent – but it’s not the major driver of this year’s fires.

“Arson is one of many human-caused bushfire ignitions, but it is also very specific in its definition, and refers to deliberate acts to cause damage,” Dr Thornton says.

“There are many accidental ignitions from people that cause more fires, and what we’ve seen this season is widespread dry lightning storms starting many of the fires in mountainous and hard-to-access areas.

“There have been many false and misleading comments regarding the role of arson in these fires.”

When will it all be over?

Recent heavy rain has brought huge relief, particularly across New South Wales, but is this season the start of a new normal? Will it all happen again next summer?

“Mid to late January saw some rain across parts of southern Australia, which was a welcome relief for many of the areas that have seen devastating bushfires over the last few months,” Dr Thornton says.

“While the rain is important, the fire season has many months to go in southern Australia. It will be a long season. We’ll see bushfires throughout February and March and, without widespread rain, potentially into April.

“Our underlying conditions have been so dry for such a long period of time that it doesn’t take much to dry out after rain.

“The weather conditions we see between now and the beginning of the next fire season will determine what sort of risk we will experience in 2020/21.”