Catastrophe declared for flood-hit parts of NSW

Catastrophe declared for flood-hit parts of NSW

The Insurance Council of Australia (ICA) has declared a catastrophe for large parts of NSW hit by storms and flooding in recent days, with more than 5,000 claims made to date and Federal assistance extended to 34 local government areas (LGAs).

The ICA's catastrophe declaration escalates and prioritises the insurance industry's response for affected policyholders, with claims to be triaged for direct urgent assistance to the worst-affected property owners.

The association is also monitoring the situation in South East Queensland to determine if it too requires a catastrophe declaration.

"It's too early to understand the extent of the damage to property in affected areas and to estimate the insurance damage bill, however insurers have received over 5,000 claims in the past few days," says ICA CEO Andrew Hall.

"The insurance industry has made this catastrophe declaration to activate services and support for affected homeowners and businesses and reassure them that their insurer is there to help.

"As many areas are currently inaccessible due to floodwater, insurers are expecting further claims in coming days as emergency services allow residents to return to their properties to examine the extent of their damage and losses."

IAG (ASX: IAG) - the operator of NRMA Insurance, CGU Insurance, WFI Insurance and Coles Insurance in flood-affected areas - announced today it is ramping up support after more than 2,100 claims were made by 8pm last night, mainly covering property damage.

The insurer says it is seeking out emergency accommodation for customers and ensuring call wait times are not long for those wanting to lodge a claim.

IAG CEO and managing director Mr Nick Hawkins emphasises how stressful this time is for people affected by the severe weather.

"Our immediate focus is on the safety of all the communities impacted by this heavy rain and flooding and we urge everyone to follow the directions of the emergency authorities," he says.

"We now have additional resources in place to help our customers get back on their feet and we encourage customers to contact us to lodge their claim as soon as possible so we can organise immediate assistance.

"As soon as it's safe to access the impacted areas, we'll have our teams on the ground to begin the assessment and repair process, but our customers can access immediate help, including emergency accommodation, as soon as they contact us."

The company had a maximum event retention of $169 million at 1 January 2021, which is reduced to $135 million for a second event. The group says it will provide a market update once it is able to more accurately determine the net cost from heavy rain and flooding before it gives.

Meanwhile, Suncorp Group (ASX: SUN) had received 1,300 claims by 10am today with more than one in five coming through online.

"Our thoughts are with communities contending with this weather and the emergency services personnel and volunteers who are putting themselves in harm's way," Suncorp Group  CEO Steve Johnston says.

"Our Customer Support Teams will be deployed to the most impacted regions when waters recede, and our affected bank customers can access our emergency relief package.

"Our customers can be assured that we're committed to their recovery and we will be with them every step of the way."

Suncorp's main catastrophe program has a maximum first event retention of $250 million, strengthened by an aggregate excess of loss (AXL) protection which provides $400 million of cover in excess of a retention of $650 million with an event deductible of $5 million.

The group's FY21 natural hazard allowance is $950 million, and as of 28 February its total natural hazard costs in Australia and New Zealand were $643 million.

IAG shares are down 2.16 per cent at the time of writing, while falls have been experienced for insurers Suncorp and QBE Insurance Group (ASX: QBE) of 1.28 per cent and 1.94 per cent respectively.

Government assistance

Yesterday the Federal Government announced it had activated the Australian Government Disaster Recovery Payment (AGDRP) and Disaster Recovery Allowance (DRA) to support an additional 18 local government areas affected by the storms and flooding across NSW.

The activation applies to Blacktown, Blue Mountains, Camden, Campbelltown, Canterbury Bankstown, Cumberland, Fairfield, Hawkesbury, Hornsby, Inner West, Ku-ring-gai, Liverpool, Northern Beaches, Parramatta, Penrith, Sutherland, The Hills and Wollondilly.

This is in addition to 18 LGAs that were already activated: Armidale, Bellingen, Central Coast, Cessnock City, Clarence Valley, Coffs Harbour, Dungog, Hawkesbury, Kempsey, Lake Macquarie, Maitland City, Mid-Coast, Nambucca Valley, Newcastle City, Port Macquarie-Hastings, Penrith, Port Stephens and Tenterfield.

"This package will provide much needed assistance to those who had suffered a significant loss, including a severely damaged or destroyed home, serious injury or who have lost a family member," Minister for Emergency Management David Littleproud said.

"The Australian Government will continue to act swiftly to support communities directly affected, particularly those whose homes have been significantly damaged or flooded."

The AGDRP provides a one-off, non-means tested payment of $1,000 for eligible adults and $400 for eligible children, who have been seriously injured, lost their homes or whose homes have been directly damaged, or the immediate family members of a person who has lost their life, as a direct result of the storms and floods.

Meanwhile, the DRA provides a short-term income support payment to help people whose income is affected as a direct result of the event. People eligible for DRA can access income assistance for up to 13 weeks, equivalent to the maximum rate of JobSeeker Payment or Youth Allowance.

Equivalent financial assistance will also be available to eligible New Zealand citizens ('non-protected' Special Category Visa, subclass 444 holders) affected by the storms and floods.

Minister for Government Services Stuart Robert said Services Australia had been on standby to assist in disaster affected areas.

"Services Australia Disaster Assistance phone lines are open nowthe fastest and easiest way to claim disaster assistance is over the phone by calling 180 22 66," Minister Robert said.

"Services Australia are also activating additional response measures through its Mobile Service Centres and Mobile Services Teams, and stand ready to provide on the ground assistance when safe to do so.

"There may be some disruption at Services Australia service centres in affected areas over coming days. We ask that people who use these services to access them via online or over the phone where possible. I urge people to heed local emergency services warnings and do not travel unless safe to do so."

The Australian Government will also lift mutual obligation requirements for job seekers in the Local Government Areas impacted by the NSW floods and storms from Friday 19 March until Tuesday 6 April 2021.

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