Australia’s 2022 flood costs break previous records

The Insurance Council of Australia (ICA) has provided updated data on the storms and floods that impacted South-East Queensland and coastal New South Wales in February and March, showing that the event is estimated to be Australia’s costliest flood ever.  

Using costs from 197,000 claims across both states, the event is estimated to have cost $3.35 billion in insured losses.  

This makes the event the costliest flood in Australia’s history, and the fifth most costly disaster after the Eastern Sydney Hailstorm (1999, $5.57 billion), Cyclone Tracey (1974, $5.04  billion), Cyclone Dinah (1967, $4.69 billion) and the Newcastle Earthquake (1989, $4.24 billion).

Claims inflation drives losses

The rise in claims costs compared to previous floods is being driven by higher costs in property, contents and commercial property classes, reflecting the increased cost of materials and a challenging supply chain environment.  

More than 11 per cent of claims have already been closed and $580m has already been paid to policyholders.  

Andrew Hall, CEO, Insurance Council of Australia, commented: ”We knew that this year’s east coast flooding was one of the biggest floods in our history, but these updated numbers show that in monetary terms it was in fact the biggest ever.  

“Only four other disasters have cost more, and this is not a record we want to beat.  

”That’s why it’s imperative that governments at State and Federal level commit to a significant increase in investment in programs to lessen the impact of future events.  

”We also need to plan better so we no longer build homes in harms way, make buildings more resilient to the impacts of extreme weather, and remove state insurance taxes which only discourage adequate insurance cover.”