Insurer review uncovers forecast flaws, black-mould blowout
Australian insurers’ catastrophe plans failed to anticipate floods the size of last year’s east-coast inundation or economic logjams, according to an insurance-sector commissioned review.
This lack of insurer foresight meant some scenario planning had limited usefulness, according to the Deloitte review for the Insurance Council.
East coast flooding, like in Ipswich’s Goodna last year, caused $6b in insurance claims.
Black-mould infestations were exacerbated following delays and confusion among customers about obtaining clearance to clear debris, worsening people’s health, the review also found. Some policies require the insurer to assess damage before clean-up can begin.
The review also further confirmed problems unearthed in earlier examinations of the east coast flooding and other events. Those included communication breakdowns that alienated customers with lengthy claims, and access to some resources such as hydrologists was strained in the disaster.
The review, which covered eight insurers with 99 per cent of claims from disaster costing the sector almost $6 billion, issued a string of recommendations. They included reducing manual processes or better data modelling, such as hydrology reports, to speed up claims handling, and that insurers should also improve their workforce planning.
Among problems identified in the review were that insurers relaxed skill requirements to hire staff to handle the wave of claims. “This creates an initial slowdown in output of claims managed and can impact the quality of onboarding and training, and therefore customer interactions,” it found.
Some technology systems were also too old to efficiently handle the wave of claims rapidly. Several insurers still used DOS-based operating
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