This Aussie Summer Came With A $2.2 Billion Price Tag From Natural Disasters
A number of 'catastrophic' weather events sparking tens of thousands of insurance claims in three Australian states, have racked up a damage bill of more than $2 billion in just three months.
That's according to the Insurance Council of Australia, which claims that staggering figure is from just three weather events over the 2018-2019 summer.
Last month's Bunyip bushfires in eastern Victoria have seen more than $20 million of losses from 365 claims, while more than $1 billion worth of losses was tallied from the storms which inundated Townsville and parts of central Queensland.
But it was a freak hail storm in December in NSW which caused the greatest damage financially, with the ICA calculating losses at more than $1.19 billion from around 130,000 claims.
While the damage bill is larger than the same period last year, ICA General Manager of Communications and Media Relations Campbell Fuller said it's not the worst Australia has seen.
Recent statistics show years which have surpassed the $5 billion mark in damage bills, but Fuller said it hasn't stopped insurers working "around the clock" in all three states to support those affected.
How Do We define 'Catastrophic' Events
While it may have felt like the number of extreme weather events this summer was endless, with countless fires across the country and even a dual cyclone as recently as this month, not all are officially listed as catastrophic disasters.
Fuller told 10 daily that 'catastrophes' are when the general insurance industry anticipates it will need to provide a significantly above normal response.
"That is often around the number of claims, the type of claims, the area in which the natural disaster has taken place and whether that area has been hit by natural disasters in the past," he said.
"When we start anticipating that the cost of claims is in the tens of millions, it's a trigger for us to be able to say to the government 'OK we are stepping up, we are going to prioritise claims for this particular catastrophe'."
Fuller said catastrophe declarations also trigger the establishment of task forces for talks between the government and other industries as well as a disaster hotline for claims.
Are Catastrophic Events Worsening
Director of the ANU Climate Change Institute, Professor Mark Howden, said Australia is certainly seeing an increase in big weather events, including floods, fires, storms, and cyclones -- which is in line with climate change projections.
"We are seeing increases in the insured loss and uninsured losses pretty consistently," Howden told 10 daily, adding it wasn't just the catastrophic events that were increasing, but localised weather events such as hail storms as well.
He said owing to these increases, the insurance industry has to compensate for the increasing risk by hiking up premiums.
But Howden said while the industry was developing to keep up with these changes, there was more work to be done.
Findings from a survey of large banks, insurers and superannuation trustees by the Australian Prudential Regulation Authority released last week, claimed two-thirds of respondents did not believe climate change was currently a material financial risk to their business.
Howden said that figure was "astounding".
He said insurance companies could be looking into much more "fine-grained ways" at locating and mitigating risk zones, and examining how these risks are changing.
He said outside of premiums, research from insurance companies could even influence things like how houses are constructed.
But it doesn't all fall on insurance companies. Howden believes the research community can also contribute by mapping out risk profiles in particular areas -- a strategy some insurance companies have already adopted.
Fuller told 10 daily the ICA had recently undertaken groundbreaking research into understanding flood risks.
The results found Queensland was the most disaster exposed area in Australia, with 16 out of the top 20 flood-prone federal electorates located in the state.
Howden said insurers, researchers and other stakeholders needed to work together to "share risk" and avoid "knee-jerk reactions" in policy when it comes to rebuilding after a catastrophe.
"We need to build it back better, we can't afford to build the same, we actually need to be thinking hard".
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