Insurance Price Tag for Australia’s Record-Breaking Floods Estimated at A$3.35B: ICA

May 6, 2022

The storms and floods that hit South-East Queensland and coastal New South Wales in February and March are likely to be Australia’s costliest floods on record, according to the Insurance Council of Australia (ICA).

Using updated data, the ICA said that by analyzing actual claims costs from 197,000 claims across both states, the event is estimated to have cost A$3.35 billion (US$2.4 billion) in insured losses.

This makes the event the costliest flood in Australia’s history, and the fifth most costly disaster after the Eastern Sydney Hailstorm (1999, A$5.57 billion), Cyclone Tracey (1974, A$5.04 billion), Cyclone Dinah (1967, A$4.69 billion) and the Newcastle Earthquake (1989, A$4.24 billion). (All these disasters have been normalized to 2017 values).

The rise in claims costs, compared to previous floods, is being driven by higher costs in the personal property, personal contents and commercial property classes, reflecting the increased cost of materials and a challenging supply chain environment, said the ICA.

More than 11% of claims have already been closed and A$580 million (US$411.6 million) has already been paid to policyholders.

The ICA said 169,961 property claims have been filed, or 86.4% of the total price tag, and 25,642 motor claims have been filed, or 13% of the total. In addition, 1,158 other claims have been filed, which are 0.6% of the total.

The updated data provides a more accurate picture of the cost and impact of the event and makes the case for investment in measures to lessen the impact of future events even more compelling, said the ICA.

In its recently released report, Building a More Resilient Australia, the ICA called on Australian governments to implement a range of measures to better protect households and communities from the impacts of extreme weather, including a doubling of Federal funding to A$200 million a year over five years matched by the states and territories.

“We knew that this year’s east coast flooding was one of the biggest floods in our history, but these updated numbers show that in monetary terms it was in fact the biggest ever,” commented Andrew Hall, CEO, Insurance Council of Australia.

“Only four other disasters have cost more, and this is not a record we want to beat. That’s why it’s imperative that governments at State and Federal level commit to a significant increase in investment in programs to lessen the impact of future events,” he added.

“We also need to plan better so we no longer build homes in harm’s way, make buildings more resilient to the impacts of extreme weather, and remove state insurance taxes which only discourage adequate insurance cover.”

Photograph: A petrol station inundated by the floodwater in southwestern suburb of Camden in Sydney on March 8. Photo credit: Muhammad Farooq/AFP/Getty Images.

Related:

Topics Flood Australia

Was this article valuable?

Here are more articles you may enjoy.