Lessons learned from a $6 billion season Insurers stepped up to manage more than 300,000 claims after a massive run of natural disasters By Miranda Maxwell
A
social media meme doing the rounds this year sees one weary citizen yearn that they “just want 2021 to be precedented”. Australia’s claims managers must relate wholeheartedly to that sentiment after a record-breaking 2019/20 natural catastrophe season which produced insured losses just shy of $6 billion. A year on from last summer’s terrifying mega firefronts which tore through 8 million hectares and alone produced $2.32 billion in insured losses, we can reflect on the experience of insurers swamped by more than 300,000 claims stemming from the November-April 2020 period. Australia and New Zealand have both confronted a decade of devastating catastrophes – from the Townsville floods, cyclones Debbie and Yasi, prolonged droughts and destructive earthquakes in New Zealand. Yet insurers say last summer still shocked
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experienced claims managers. “There is no doubt the Black Summer was extraordinary,” Suncorp’s Head of Disaster Response and Event Claims Cath Stewart told Insurance News. “We saw 12 major insurance events spanning floods, hail and bushfires across the summer which really sets it apart from previous seasons. “The 2019/20 summer reinforced the increasing severity and unpredictability of the disaster season.” Suncorp’s disaster response team prepares for these events by running complex simulations to refine its processes. The insurer successfully managed more than 80,000 insurance claims after last summer’s widespread catastrophes, mostly related to hail, storm and flood. Suncorp says 2019/20 is a reminder that climate change is increasing the severity and frequency of natural disasters in Australia and the country must invest in
natural hazard resilience. “This is not something Australia can just kick down the road without addressing the root cause,” Ms Stewart says. “The nation’s natural disaster damage bill is having a large effect on the price of everyone’s insurance.” The industry has helped thousands of Australian families cope with such a severe run of fire, flood and hail – while managing the complications of a coronavirus pandemic on top. The recent final report of the Royal Commission into National Natural Disaster Arrangements includes a chapter dedicated to the insurance industry, noting that “general insurance plays several important roles in managing natural disaster risk”. “It allows people to manage a risk financially, including the risks posed by natural hazards, under agreed circumstances,” the report says. “It can communicate risk via the cost of premiums and thereby influence
