Deloitte will review the insurance industry’s response to record floods that struck Queensland and NSW early last year.

A host of new rainfall records were set during the extreme February 22 to March 9 event, and many areas received more than half their average annual rainfall total in just a week.

The Insurance Council of Australia (ICA) appointed Deloitte in order to identify the good and the bad as part of efforts to optimise future claims handling.

“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,” ICA CEO Andrew Hall said.

The “extraordinary” volume of claims across a very wide geographic area “tested the systems insurers use to respond to customers,” Mr Hall said, and raised issues such as a shortages of expert assessors, building labour and materials constraints, and the complexity of recovery and resilience programs delivered by state governments.

The floods – Australia’s costliest extreme weather event – produced more than 240,000 claims with insured losses of $5.81 billion. More than 83% of claims are now closed.

Insurer response times, claims and complaints handling, resources deployed, communication with policyholders and engagement with stakeholders will all be examined as part of the review. The review will identify lessons learned, both from good practice and those requiring improvement, to "better prepare and inform the industry’s response to future extreme weather events in a changing climate,” ICA said.

The final report, including recommendations for insurers, is expected by the third quarter.