NIBA WELCOMES ANNOUNCEMENT OF PARLIAMENTARY INQUIRY INTO INSURERS’ RESPONSE TO THE 2022 FLOODS

The Assistant Treasurer and Minister for Financial Services Stephen Jones has announced a parliamentary inquiry into insurers’ response to the 2022 floods. The inquiry will take a whole-ofeconomy view of the ongoing challenges faced by intense and frequent flood events.

NIBA welcomes the announcement of the parliamentary inquiry. Brokers play a crucial role as advocates for their clients, ensuring they receive the support and coverage they are entitled to. Australians impacted by the events have faced ongoing challenges both at the time of claim and during the rebuilding process.

Following these devastating events, NIBA has worked with the Insurance Council of Australia (ICA) to ensure that feedback from those on the ground is used to improve the claims handling process and we look forward to sharing these insights with the inquiry. With the intensity and frequency of these extreme weather events increasing, NIBA commends the inquiry for taking a wholeof-economy view, to improve outcomes for Australian consumers.

The inquiry will investigate the preparedness of insurers to respond to the frequency of these events. It will also consider supply chain issues, skills and labour shortages, claims handling, and communication with policy holders before, during and after these devastating events.

Assistant Treasurer and Minister for Financial Services Stephen Jones outlined his goal in establishing this parliamentary inquiry.

“Extreme weather events are increasing, and insurers need to be proactive and prepared to respond. We need to look at the whole ecosystem in responding to natural disasters. The last thing people need when they’ve lost their home, or their business is to be navigating complex claims processes or waiting months for materials and labourers.”

“I have one goal in establishing this inquiry, and it is to improve the experience for consumers who have been impacted by natural disasters.”

Natural disasters continue to have a massive impact on the lives of Australians, especially those in rural and regional communities. 2022 was a record year for insured losses, driven by flooding in Northern New South Wales and South-East Queensland in February-March, in the Hawkesbury-Nepean in July, across three states in October, and in the Central West of New South Wales in November. The 2022 floods in South-East Queensland and NSW are the costliest natural disaster for insurance costs in Australian history.

According to the ICA, these events have so far cost $7.17 billion in insured losses from more than 300,000 claims. Two weeks before the February-March floods, the ICA released its Building a More Resilient Australia report, which identified those areas of Australia most at physical and economic risk from worsening extreme weather. Many of the communities identified in the report were impacted by flooding in 2022, highlighting the urgent need for action.

ICA CEO Andrew Hall also welcomed the parliamentary inquiry, adding: “In 2022, insured losses across all categories totalled $36.5 billion from 5 million claims – meaning last year one quarter of adult Australians made an insurance claim. Any review that supports the ability of insurers to improve how they carry out their crucial function is welcome, and we look forward to participating.”

The ICA’s own independent review of insurers’ response to the February-March 2022 floods is due for release in October.