The hailstorm that hit Sydney two decades ago would cause an estimated $8.85 billion in losses if it happened today, topping the record southeast Queensland and NSW floods and highlighting rising risks as a result of population growth, an Insurance Council of Australia (ICA) report says.

New data calculated by catastrophe modelling firm Risk Frontiers uses methodology that normalises the insured losses of past catastrophes to account for inflation, changes in property numbers and values and stricter building codes.

The eastern Sydney hailstorm that hit in 1999 caused an original estimate of $1.7 billion in losses.

Cyclone Tracy, which killed 71 people and caused $200 million in losses when it struck Darwin in 1974 would cause $7.4 billion in claims today. The Newcastle earthquake would cause losses of $6.54 billion and Cyclone Dinah, which affected the Queensland coastline in 1967 would cost $6.19 billion.

“What goes hand in hand with this is the population growth, which has grown enormously since then, particularly on the east coast, and continues to grow,” ICA CEO Andrew Hall tells insuranceNEWS.com.au.

“Risk mitigation remains the key here, and when we think about population growth, it’s going to be about putting people in safe, durable and insurable homes.”

The Insurance Catastrophe Resilience Report includes the normalised and inflation-adjusted figures for past catastrophes, as well as figures for declared disasters last financial year.

Total catastrophe and significant event claims dropped to $1.6 billion in the past 12 months. That compares to $7.28 billion the year before, which included the $6 billion record Queensland and NSW floods.

“More benign weather conditions should not provide false hope that the issues of worsening extreme weather risk have gone away,” Mr Hall said, highlighting the normalised figures from past events.

“This new data shows that when, not if, extreme weather events strike large population centres in the future, we can expect them to have a greater impact and be more costly, making the case for risk mitigation even more pressing.”

Victorian, NSW and Tasmanian flooding last October cost $736 million as a result of 22,151 claims.

In November, a downpour led to severe flooding in Central West NSW, costing $237 million.  The floodwaters reached SA in December with the River Murray Floods costing $393 million.

The final declared event for the financial year was the hailstorms that hit Newcastle in late May, causing insured losses of $238 million.

The most recent floods came after three consecutive La Ninas, with the industry facing soaring claim numbers, along with rising reinsurance costs, inflation and building and supply chain issues, driving premiums higher.

“It has been a challenging period,” Mr Hall said. “If we have a quiet summer this year, with fewer events, everyone in the sector is hopeful that it will enable the industry to catch its breath.”

The report also includes feedback from community engagement after natural disasters.

ICA says policyholders have called for more frequent and clearer communication from insurers about the claims process, timeframes and progress, and prefer to have one claim manager throughout.

In many instances obtaining agreement on the scope of works was a hurdle, temporary accommodation proved difficult in regional and rural areas, and customers wanted to understand more about where and how to make a complaint.

“Improving customer awareness of what should be expected in a scope of works and adding to the scope of works will be beneficial for both customers and insurers,” the report says.

Those who’d been flooded more than once were keen for greater choice or control around the rebuild process, with particular interest in building back “like for right” rather than “like for like” to better protect their property, while flood cover and hydrology reports have been a key topic.

“Given the number of flood events, customers wanted more information about the approach and process insurers take in determining how their property was inundated, how the definition of flood cover is applied, and the causes of delays in this process,” the report says.