Nearly a quarter of a million properties in Australia are exposed to a 1-in-20 year flood risk according to new data analysis published by the insurance council of Australia. The research is part of the council's submission to a parliamentary inquiry into insurers' responses to major claims from flooding events in 2022.
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TVTranscript
00:00 One of the things the insurance industry has been saying for a very long time is that flood
00:06 is our most expensive peril.
00:08 And the reason for that is it's very predictable.
00:11 We know where homes are going to flood.
00:14 And the cost of building in the flood risk into an insurance premium has gone up.
00:20 And off the back of last year's events, which were the largest natural disaster event in
00:26 terms of an insurance payout in Australian history, it has had an enormous impact.
00:32 And what we're trying to help the inquiry understand is the level of risk that still
00:37 exists in Australia when it comes to flood.
00:40 Nearly 220,000 homes are sitting in an area that would be designated a one in 20 year
00:46 flood zone, or in other words, a 5% chance every year that a home could be flooded.
00:52 Now these are serious figures and it just shows you how much of Australia perhaps was
00:58 developed in the wrong location in the last 100 years or more.
01:03 And the job that is in front of us in terms of removing homes from those unsafe locations.
01:08 Now when the parliamentary inquiry began in August, we still had households where insurance
01:13 claims hadn't been processed and people were unable to make necessary repairs.
01:18 What do you say to those who are finding themselves in that situation still?
01:23 Well, last year's events have been catastrophic in their size.
01:30 The industry in Australia has never experienced a surge in claims.
01:35 The flood event that happened in February, March was six times larger than any previous
01:39 event over the past decade in terms of claims.
01:43 So the system was absolutely stressed and that's why we fully anticipated the government
01:48 will be looking at how the system can respond.
01:52 Australia has to become a leader in dealing with extreme weather events because we have
01:56 populations that have grown in areas that are very risky.
02:02 In the last 20 years, areas like the north coast of New South Wales, the southeast corner
02:06 of Queensland and the like have had huge population expansion and those areas are very vulnerable
02:12 to some of these weather events.
02:14 So we've had to look very carefully at how insurers can cope with a scenario where claims
02:19 jump from 2,000 a day to 10,000 a day.
02:23 How do you get enough assessors, builders, electricians, all the people you need after
02:29 a flood event into a community to be able to aid with the recovery?
02:33 So we are looking very closely at what all of those lessons were out of last year's event
02:39 and working with government to understand how we can partner effectively with government
02:44 moving forward and be able to collect the sort of data we need to be able to gear up
02:48 again if the worst happens again.
02:50 [BLANK_AUDIO]