Australia faces up to key challenges following recent CAT events

11th February 2011

The Australian insurance industry is facing up to a number of significant challenges following the recent catastrophic floods in both Queensland and Victoria, Cyclone Yasi and the devastating bush fires in Western Australia.

AustraliaFloods2011

Photo: Toowoomba. Flood damage to pub, 2011.

Perhaps the biggest challenge is on available resources, with the local claims industry being stretched by both the large number of claims made following these incidents as well as the vast geographical spread of loss locations.  The knock on effect of this has been to slow the response times for inspections and this will undoubtedly increase claims settlement times. 
 
Australian insurers and loss adjusters would normally look to New Zealand for support and assistance with major events.  However New Zealand is still stretched following the earthquake in Christchurch on 4th September 2010 with many within the New Zealand insurance industry still looking towards Australia to assist as aftershocks continue to be felt.
 
Another significant challenge facing the industry centres around the definition of flood. A standard "flood" definition was proposed by the insurance industry in 2008 however this proposed definition was rejected by the Australian Competition and Consumer Commission as being "anti-competitive".  Currently definitions of "flood" vary and many policy holders have been left without cover for damage caused as a result of the recent floods.
 
This shortage of resources coupled with the issues around flood policy definitions has seen the industry respond slowly to these events.  The patience of many policy holders is being tested and with further bad weather predicted over the next 3 months, these problems and frustrations will only increase.
 
For further information or assistance please contact:


James Capell, MD Designate, Concordia Consultancy (Australia) Pty. Ltd, Sydney, Australia
 
james.capell@concordiaconsultancy.com
Tel: +61 421 039 314

Singapore: sam.koh@concordiaconsultancy.com
Tel: +65 6246 4672
 
London: spencer.clark@concordiaconsultancy.com
Tel: +44 207 623 8461

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