Brokers poised to play critical role in managing flood risk

Attendance at the “Learnings of the Hobart Storms’ session during the 2018 NIBA Convention, couldn’t be more crucial as a new study declares that climate change will increase flood risk.

Intense rainfall leading to extreme flash flooding will be worse than expected under climate change modelling, according to research published in the Nature Climate Change journal.

The findings raise interesting questions about who is responsible for managing these changes, who should wear the risk and, ultimately, who pays for storm damage.

NIBA Divisional Committee Chair for Tasmania and Gallagher Hobart Branch Manager, Daniel Quintin will be presenting a session at the 2018 NIBA Convention on the learnings from the Hobart Storms in May.

He says, “Insurance brokers play an invaluable role during catastrophes especially in regional areas and need to stay on top of emerging risks to be able to better assist clients.”

The consequences of the increased flood risk could also lead to insurers raising their premiums or refusing to provide cover for flooding. The study showed the amount of water falling in short intense storms, such as thunderstorms, is increasing at a rate two to three times higher than expected, with the most extreme events showing the most significant upsurges.

Engineer, co-author and University of Adelaide Associate Professor, Seth Westra says “short, sharp rainfall events” are becoming more intense, causing flash-flooding across Australia.

Bureau of Meteorology Senior Climatologist, Darren Ray, says decision makers, including governments, have tended to design projects based on the climate change models that are potentially out of date.

“This suggests there’s a whole range of work that needs to be done to understand the likely flood risk in coming decades because of climate change,” says Ray.

Quintin stresses, “While insurance may not always seem the highest priority for some, the recent catastrophes have shone a light on how individuals and businesses need the right advice and right cover to protect themselves. With major events increasing in terms of frequency and severity, the broker is a vital conduit into the insurance market to transfer these risks with a suitably robust program, which adequately reflects the insured’s demands and needs.”

His session at the convention will provide an enhanced understanding of the May 2018 CAT claims, and how the market(s) responds, and the crucial part brokers play, especially so in regional areas, and some of the logistical challenges one faces on an island.

Quintin says, “I’m looking forward to seeing as many people from the market as possible at NIBA2018, and having the opportunity to share thoughts and ideas with the insurance community across Australia.”