Insurers pay out $2.28 billion in claims in 2020/2021

The Insurance Council of Australia’s 2020/2021 Insurance Catastrophe Resilience Report reveals insurers paid out $2.28 billion for 133,999 claims last year. Of these, 14,000 were commercial claims totalling $407 million. 

Many claims were related to three events:

  • Bushfires that affected Perth’s outskirts in February 2021

The hilly, semi-rural town of Wooroloo on Perth’s outskirts suffered severe bushfires from the start of February 2021, with 11,000 hectares destroyed along with 86 homes and farm buildings.

As the report details, “an Insurance Catastrophe for the Perth Hills bushfire was declared on 5 February 2021 following the deployment of Insurance Council personnel to Perth earlier that week to meet with government agencies, emergency services and impacted property and business owners.”

One positive was a coordinated, state-and federal-government funded clean-up program. This initiative meant all property owners who suffered damage were treated equally, no matter if they had insurance or not.

“At the moment, insurers are responding to the 60,000-plus claims stemming from the severe storms and flooding that has battered the eastern seaboard across Queensland and so far in 2022.”

  • Storms and floods in Queensland and NSW in March 2021

The ICA declared an Insurance Catastrophe on 22 March 2021 for areas across New South Wales and south-east Queensland across the mid-north coast towns of Port Macquarie, Kempsey, Laurieton and Taree, and west of Sydney around Penrith and in the Hawkesbury-Nepean valley. Many of the affected areas were still recovering from the previous year’s bushfires.

The extreme weather was caused by a very deep low-pressure system that pushed substantial amounts of moist tropical air into eastern Australia, a system that was very similar to this year’s storms and floods.

  • A cyclone that hit the Western Australian coast April 2021

On 14 April 2021 the ICA declared an Insurance Catastrophe when Tropical Cyclone Seroja hit the West Australian coastal town of Kalbarri and the inland community of Northampton.

This cyclone smashed into an area that is not normally affected by cyclones. So the buildings and other structures that were damaged were never built to withstand such a severe weather event. As a result, there was widespread devastation across the affected area, with homes, businesses, telecommunications systems, roads and energy assets all suffering severe damage.

As the report notes, “The town’s remoteness, the shortage of trades, and COVID-related border restrictions have all compounded to slow down the recovery process for impacted policyholders.”

At the moment, insurers are responding to the 60,000-plus claims stemming from the severe storms and flooding that has battered the eastern seaboard across Queensland and so far in 2022. Next year’s report will include a comprehensive review of the claims made for this Insurance Catastrophe, one of the worst on record.

Your Steadfast broker can help guide you through the claims process if you are impacted by a serious natural disaster. Contact us today to find out more.

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content.

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