Insurers flooded by huge losses

BUSINESSES are being slapped with major price bumps on insurance coverage after floods hit NSW and Queensland, setting new records for insurance losses.

A new record has been set for Australia’s most expensive floods after the 2022 inundation across parts of NSW and Queensland now expected to cost insurers $3.5bn.

The Insurance Council of Australia said expected 2022 flood losses were now the fifth most expensive insurance event to hit Australia.

The 2022 floods are only exceeded by the 1989 Newcastle Earthquake, Cyclone Dinah, Cyclone Tracey, and the Eastern Sydney hailstorm.

The Insurance Council of Australia said 197,000 claims had come in across Queensland and NSW after the floods.

Insurers have already paid out $580m to policyholders.

The ICA said higher materials costs and a tight supply chain had only worsened the costs, which have exploded in personal property and commercial property classes.

ICA chief executive Andrew Hall said the cost showed why it was “imperative” that governments acted to mitigate future events.

“We also need to plan better so we no longer build homes in harm’s way, make buildings more resilient to the impacts of extreme weather, and remove state insurance taxes which only discourage adequate insurance cover,” he said.

Mr Hall said the disasters were driving higher insurance prices, but noted rising costs of reinsurance were also being felt in premiums.

Broker network Honan Insurance Group has warned the major flooding was already having impacts. Honan national head of corporate insurance and risk solutions Poppy Foxton said insurers were slugging businesses in flood zones with 25 to 50 per cent jumps in renewal notices.