With insurance claims still mounting from recent Eastern Australian floods, the Insurance Council of Australia (ICA) says now is the time to prepare property for what is forecast to be a wet spring and possibly summer across eastern Australia, following the declaration of a La Nina weather pattern by the Bureau of Meteorology (BOM).
The predicted La Nina would be the third in a row for eastern Australia.
In 2021 and 2022, La Nina rain patterns led to destructive floods across many communities in parts of southeast Queensland and New South Wales. The 2021 and 2022 combined insurance damage bill for La Niña-generated east coast storm and flooding is at A$5.92bn ($3.95bn) with more than 296,000 claims lodged.
ICA CEO Andrew Hall said, "The last couple of years have shown the impact that heavy rains can have on property, livelihoods, and our own well-being.
"We can’t control the weather, but there are practical steps we can all take to reduce the risk that storm and flood can bring or make recovery from those events easier."
The ICA has listed several preparatory steps that property owners can take to be better prepared for the heavy rainfalls that have been predicted by the BOM.
With the BOM confirming a third La Nina system is expected over the summer months, data analytics firm Decision Inc Australia states small businesses should expect premiums to remain elevated for the foreseeable future as insurance providers strive for profitability.
Decision Australia combines data from both the Australian Prudential Regulatory Authority (APRA), which oversees general insurance companies, and the BOM, to show how the value of written premiums and annual national rainfall have grown in tandem since 2019.
Gross written premiums — insurance company revenues from written policies — rose from A$8.3bn in 2019 to A$8.9bn in 2020 and A$10.4bn in 2021, the firm says.
Over the same period, national annual rainfall increased about 70%. Much of that increase can be attributed to the La Nina weather events of the past two years, which have contributed to significant downpours and flooding, particularly on the east coast.
Mr Aiden Heke, CEO of Decision Australia, said, “As climate impacts rise, so too do the premiums."
As small businesses brace for the potential of another wet season — and the likelihood of skyrocketing insurance costs — financial regulators like APRA are taking a closer look at how climate risks are likely to buffer Australia’s economy. Early reports suggest a worrying pattern for under-insured businesses.