Cyclone Debbie losses have already hit $1 billion and the communities are in the process of rebuilding, with brokers by their side.
by Tanaya Das
Tropical Cyclone Debbie was a complex severe weather event which started as a category four cyclone bringing with it destructive winds of up to 260 kilometres an hour and heavy rain. Crossing the Queensland coast near Airlie Beach on the afternoon of Tuesday 28 March 2017, it flattened everything in its path, caused massive flooding, loss of lives and (at the time of writing) insured losses of $897 million from 56,135 claims.
The main disaster zone stretched more than 1,000 kilometres from the point where it made landfall, between Bowen and Airlie in Queensland, to the farming lands of northern New South Wales. A week after becoming extratropical, remnants of Cyclone Debbie passed over New Zealand causing flash flooding in many areas.
The Insurance Council of Australia declared the event a catastrophe on 28 March and extended the declaration to Northern NSW three days later.
At the time, ICA CEO Rob Whelan said the claims would certainly be in the hundreds of millions, but could rise to over $1 billion – a level of catastrophe not seen since ex-tropical cyclone Oswald in 2014 which caused insurance losses of almost $1.2 billion. [On 29 June, the ICA revealed that Cyclone Debbie losses had indeed hit $1 billion already.]
In the aftermath, insurance brokers rallied around those affected to ensure smooth recovery and are still doing everything they can to assist their clients.
North Queensland broker Grant Rovelli, Branch Manager with Aon in Mackay, said that he had dealt with as many as 300 claims within the first ten days mostly from the surrounding area, including the Proserpine, Airlie Beach and rural areas such as Homebush and Oakenden.
“The biggest damage in Mackay wasn’t really from the cyclone… it was the aftermath when the rains set in,” he says.
“Most of the claims have been commercial and in the rural portfolio, mainly for the sugar cane plantations in the area… There were some domestic lines too.”
He says he took a proactive approach, by getting on the phone to clients and talking them through the process.
The ICA has said the industry is prioritising claims from storm and flood-affected policyholders in the declared catastrophe areas. Many insurance companies have set up 1800 numbers to help clients out.
Rovelli adds: “Our clients know we are here to step them through over the process, our phone lines are open.”
One of his clients, Patrick Daly from Walkerston Day Care Centre, really brought home the role brokers play in keeping their clients’ businesses safe. The day after the cyclone, the river in Mackay rose and “swallowed up the centre”, he says.
“Our insurance broker Grant Rovelli contacted us straight away to clarify our cover,” he says. “The insurance company had assessors out here, and in fact, had sent their own people out to help with the clean-up and help us get organised as the local companies were all busy. We were only closed for a week. We have been partially open since Monday, 3 April, with only one section a few rooms still closed.”
Daly has appreciated that Rovelli was thorough in his advice. For example, Rovelli had suggested flood cover and insurance for loss of business. Initially unsure about taking out such cover, Rovelli’s explanation about their importance finally convinced the directors. “If we hadn’t got the insurance he recommended we would be stuffed,” said Daly.
ROAD TO RECOVERY
The eye of the storm may have passed, but the business and insurance community continues to feel the economic hit. Swiss Re placed its claims burden for Cyclone Debbie at approximately US$350 million, net of retrocession and before tax and said that the total insured market losses for wind, flood, and storm surge damages, are estimated to be US$1.3 billion.
Many industries in the area have been severely affected. For instance, in the agriculture sector, cane growers around Proserpine and Mackay, and the horticulture industry at Bowen – including tomato, capsicum and eggplant producers – have been the hardest hit. The Queensland Farmers Federation said that early figures show actual crop damage to Bowen’s vegetable industry is about $100 million, accounting for about 20 per cent of the season’s crop.
And even as the massive clean-up gets underway, some of Australia’s most iconic tourist destinations face a long road to recovery. The damage to that industry has been so colossal that the Federal Government has allocated $5 million to it in its 2017/2018 Federal budget. The package includes $3.5 million to fund tourism projects in affected areas and a $500,0000 advertising campaign by Tourism Australia to promote the area.
The peak tourism body will also “reprioritise” $1 million of existing marketing investment funds to focus its international coastal and aquatic campaign on Queensland sites.
Politicians, including PM Malcolm Turnbull and Opposition Leader Bill Shorten, have repeatedly encouraged tourists to visit Queensland as it rebuilds after the natural disaster.