Financial Services Minister Stephen Jones has announced that the Federal Government will launch a parliamentary inquiry into the response of insurers to significant flooding events last year. 

Mr Jones says the review will provide a “whole‑of‑economy view” of ongoing challenges faced after intense floods as insurers continue to pay out claims from record-breaking events across NSW, Queensland, Victoria and Tasmania.

“Natural disasters continue to have a massive impact on the lives of Australians, especially those in rural and regional communities,” Mr Jones said. 

“The inquiry will investigate the preparedness of insurers to respond to the frequency of these events.

“It will also consider supply chain issues, skills, and labour shortages, claims handling, and communication with policy holders before, during and after these devastating events.” 

Insurance Council of Australia (ICA) CEO Andrew Hall welcomed the inquiry and hopes the findings can contribute to insurance affordability and disaster mitigation solutions. 

“In 2022 insured losses across all categories totalled $36.5 billion from 5 million claims – meaning last year one quarter of adult Australians made an insurance claim,” Mr Hall said. 

“Any review that supports the ability of insurers to improve how they carry out their crucial function is welcome, and we look forward to participating.

“We strongly support the Albanese Government’s focus on improving the resilience of Australian homes and communities against extreme weather events, but more needs to be done to ensure insurance remains sustainable as the climate worsens.” 

ICA says the review should also examine the effects of other that it says have contributed to rising insurance costs. 

“In addition, the Insurance Council is urging the inquiry to examine the impact of state insurance taxes on customers’ capacity to appropriately insure, as well as how the impact of past decisions on land use planning and disaster mitigation impact community risk and insurability,” the ICA said.

The announcement of the inquiry follows the ICA commissioning its own independent review on insurers’ responses to last February-March’s floods in NSW and Queensland earlier this year, with findings expected to be released in October.   

“That review will look to identify lessons learned from insurers’ response to the floods – both from good practice and practices requiring improvement – to better prepare and inform the industry’s response to future extreme weather events in a changing climate,” the ICA said.