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HRCE launches inquiry into Australian insurers’ responses to flood claims

The Insurance Council of Australia welcomes report on insurers' responses to major flood claims

The Insurance Council of Australia (ICA) welcomed the House of Representatives Standing Committee on Economics’ report regarding insurers’ responses to claims from major floods. The report outlines 86 recommendations aimed at improving the insurance sector’s disaster response and strengthening consumer protections.

  • south-east Queensland and northern NSW floods of February and March
  • Hunter and greater Sydney floods of July
  • Victorian, NSW and Tasmanian floods of October
  • central west NSW floods of November and December

Among the key suggestions are the removal of state insurance taxes, ongoing government investment in resilience and mitigation, and halting development on floodplains. The ICA supports these measures, noting their potential to lower premiums and protect communities from future extreme weather events.

While the report acknowledges over 300,000 claims were processed from floods, it also highlights cases where customers received inadequate service or felt distressed by their experiences with insurers.

Insurers have apologized to affected customers and committed to enhancing service standards through increased investment in staff, tools, and training.

The ICA commissioned a separate report on the largest of the 2022 floods from Deloitte. A follow-up progress report will be published by year-end. The insurance industry has already begun acting on several recommendations, including efforts to create standardized maintenance clauses and improve the identification and support of vulnerable customers.

Over the coming months, the ICA will review the report’s recommendations and engage with its members, while also considering the findings of the independent review of the General Insurance Code of Practice. The ICA remains committed to collaborating with governments, stakeholders, and regulators to ensure better outcomes for customers impacted by severe weather events.

Andrew Hall, CEO of the ICA, emphasized the unprecedented nature of the 2022 floods, which resulted in over 305,000 claims and $7.7 bn in losses, with $6.3 bn from a single event. He acknowledged the challenges the industry faced in handling these events and reiterated the industry’s ongoing efforts to address these issues.

The ICA and its members thank the Committee, particularly its Chair Dr Daniel Mulino MP, for their work inquiring into this important issue and we look forward to continuing to collaborate with the Government, Opposition and other stakeholders on the report’s recommendations.

Hall also thanked the Committee, particularly Chair Dr. Daniel Mulino, for their work on the inquiry. He noted that balancing customer needs with maintaining manageable premiums will be crucial in the successful implementation of the report’s recommendations.

Nataly Kramer by Nataly Kramer