ICA commissions an external review of the industry’s 2022 flood response

The Insurance Council of Australia (ICA) has announced that leading consultancy and accounting firm Deloitte will undertake an external review into the insurance industry’s response to the 2022 South-East Queensland and Northern New South Wales floods. 

The aim of the review is to identify lessons learned from insurers’ response to the floods – both from a good practice point of view and areas of improvement – to better prepare and inform the industry’s response to future extreme weather events in a changing climate. 

As part of the review, things such as insurers’ response timeframes resources deployed, claims handling, complaints handling, communication with policyholders, and engagement with stakeholders will come under the microscope.  

According to Andrew Hall, CEO of the Insurance Council of Australia, this is the right time to look back and take stock of important learnings for the industry.  

“As the costliest extreme weather event in Australian history, last year’s floods created significant challenges for the insurance industry in addressing the extraordinary volume of claims across a very wide geographic area,” he said.  

“With more than 83 per cent of claims now closed, insurers have agreed it is timely to review the industry’s response to identify best practice and what could be improved when responding to future extreme weather events”.  

The review will also examine the impact of regulatory requirements, insurers’ interactions with government agencies and their programs and policies, and broader external pressures such as supply chain and labour constraints. To obtain a broad range of views, a consultation process that involves key stakeholders including affected local governments, elected representatives, the Australian Financial Complaints Authority and other regulators, and consumer representatives will be underway.  

Insurance customers have lodged more than 240,000 claims totalling $5.81 billion because of the floods, making it the costliest extreme weather event in Australian history. According to a report by global reinsurer MunichRe, this makes it the second costliest insured event in the world in 2022.  

You can read more about the announcement of the review at ICA’s website.