Flooding from ex-Tropical Cyclone Alfred forced Queensland Fire and Rescue, swift
water rescue teams, and firefighters to respond to more than 150 water incidents,
including rescues and evacuations across the Sunshine Coast, Brisbane, and
Ipswich.
As the clean-up effort progresses, insurance claims are rising. The Insurance
Council of Australia (ICA) reports that insurers have received more than 22,000
claims from policyholders in South East Queensland and northern New South Wales,
with most coming from Queensland.
“The spike in claims was expected and is in line with this stage in the recovery
process,” said Andrew Hall, CEO of the ICA. “Insurers are committed to prioritising
claims made by customers affected by this ongoing weather event.”
The full financial impact of Cyclone Alfred remains unclear. For comparison, Tropical
Cyclone Jasper in 2023 led to $409 million in claims, while the catastrophic floods of
early 2022 remain Australia’s most expensive insured event, with $6.4 billion in
losses.
A strong link exists between high flood exposure and low socioeconomic status.
Analysis from the 2024 National Flood Information Database (NFID) shows that
about 70 per cent of households at the highest flood risk are in areas where the
median income is below the national median of $92,000. Around 35 per cent are in
areas where the median income is below the poverty line of $58,000.
According to the ICA, of the estimated 225,000 homes in the highest flood-risk
locations nationwide, only about 23 per cent have flood cover, compared to an
estimated 60 per cent across Australia.
In February, the Insurance Council released its Federal Election Platform, calling for
a $30.15 billion Flood Defence Fund over 10 years, shared between the federal
government and the states of Queensland, NSW and Victoria. The plan includes
funding for new flood defence infrastructure, strengthening at-risk properties,
managed relocation through buy-backs, and future-proofing existing flood mitigation
efforts.
The impact of Cyclone Alfred on insurance premiums remains uncertain. However,
the ICA highlights the rising frequency and severity of natural disasters as a key
driver of increasing costs.
State governments also contribute to high premiums through taxation. Aside from the
ACT, all states and territories impose GST and stamp duty on insurance policies,
effectively double-taxing policyholders. “Last financial year, state governments
collected almost $8.6 billion in [insurance] taxes, with ESL [Emergency Services
Levies] exceeding $1.5 billion,” Andrew said. “The ICA has long been advocating for
tax reform to help lower premiums. If state governments abolished stamp duty,
premiums across the country could be reduced by nine to 30 per cent immediately.”