• Membership
• NIBA Toolbox
• NIBA Community
• NIBA College
• CAPIBA
• IRP - NIBA's Publication

User Login

What an amazing start to the year

Insurance & Risk Professional, April 2011

Whether you believe in climate change or not, one thing is clear: Mother Nature is increasingly unpredictable, unleashing her fury on us on an all too regular basis.
Just check out the most recent natural catastrophes:
• Regional Qld flooding
• Toowoomba and Lockyer Valley event
• Brisbane flooding
• Regional Victorian flooding
• Cyclone Yasi
• Victorian inundation event
• Perth bushfires
And, of course, we’ve had the devastating events across the Tasman
in Christchurch, and the earthquake and tsunami in Japan.

Prior to the 2011 floods in Qld and Victoria, the Insurance Council of Australia had recorded more than 60 environmental catastrophes in the past decade, with the property damage ranging from a few million dollars to as much as $4 billion.
At the time of writing flood damage in Qld has necessitated 40,000 claims with an estimated value of $1.5bn (excluding Cyclone Yasi). In Victoria there have already been 4500 claims.
It might seem trivial to measure the dollar value of property given the devastating loss of human life that has occurred in recent years as a result of some of the worst fires and floods in Australian history, but the fact is that the impact of natural disasters on homeowners’ and investors’ financial wellbeing can be heartbreaking.

And the full impacts on the insurance industry are yet to be realised. Certainly the industry will again be in the spotlight. Federal and state leaders have foreshadowed reforms to ensure proper flood coverage in the future, including the possibility of developing a standard definition for ‘flood’.

NIBA has thrown its support behind the proposal for a consistent definition of flooding, believing it will simplify matters and assist policyholders in better understanding the level of protection they have.
As evidenced by the flooding disaster in south-east Queensland, the current lack of standard wording has made it difficult for many policyholders to understand how exemptions for floods apply to their insurance policy.
However, as pointed out by NIBA President David Duffield recently, it was also important that any definition did not adversely affect the competitiveness of the industry.
Many will be jostling for their own agenda and you can be assured that NIBA, representing its members who act on behalf of insurance buyers, will be seeking a seat at the table for all these discussions.

On a closing note, as most readers will be aware, I recently announced that I would be retiring shortly as CEO of NIBA after 20 years in the hot-seat. If this is my last column I wish to thank all those people who have supported me over the years and wish you all well in the future.

NIBA has been very good to me – and I trust I have been very good for NIBA. Good luck. Good health. Good-bye.

Noel Pettersen
Chief Executive of NIBA