Despite the devastation of Cyclone Debbie, the insurance industry’s response is a good news case study, though there were still lessons to be learnt, delegates heard at the NIBA Convention on Tuesday.
First up, David Hughes, National Assessing Manger, Club Marine, outlined the proactive approach the boat insurer took by alerting customers via emails and in-app messages of the potential cyclone warning a week out. It also activated its experienced Claims Assessment team and sent them to Townsville around the same time. (One had to cancel his wife’s 50th birthday celebrations, and holiday to Hamilton Island). Salvage and dive teams were put on stand-by. And as the likelihood grew, communication efforts intensified.
After Cyclone Debbie hit, rising flood waters inevitably followed and access became difficult. Once the assessors were able to get in, they found almost all the boats in one marina beached or on rocky banks. None escaped damage. Boats had to be relocated to repairers as far away as Sydney, such was the number, Hughes said.
Hughes then showed examples of the damage, including a luxury Cortana vessel, valued at $2.6 million. In another one, a sinking boat was salvaged and the owners contacted. It was assessed, written off and the claim was settled in 10 days.
Hughes highlighted the collaboration within the communities and towards his team. He said the team worked 14-hour days until the end of June. Allianz had a total of 19,600 claims and paid out $37 million with 60 per cent of claims since settled.
Next, bringing it back to what the industry has learnt, Revell Weightman, Forensic Accounts Manager, LMI Group, took a close look at some key policy differences since Cyclone Yasi.
He noted that there were now higher allowances of 20 per cent to protect against price increases. Island claims were now covered, and there was an extra 20 per cent for imminent damage. Cover now began from the threat of damage, instead of the impact. Related businesses, such as customers and suppliers, would be covered for loss, without suffering any damage. This has solved a lots of stresses for clients.
Weightman said some of major stumbling blocks LMI observed with every cyclone were:
- progress payments – making these as early as possible.
- determining the extent of the damage, and identifying ways to improve a client’s building against future damage and claim difficulties.
- determining the cause of the damage – whether it was due to the Cyclone or storm surge, which generally isn’t covered.
- wider Area Damage, such as tourism and the loss of income. This can work conversely as Weightman shared the story of a caravan park that lost half its trailers, but had almost 100 per cent occupancy for the rest because they were full of road repairers.
Weightman finished with a couple of policy coverage considerations, such as:
- indemnity period
- declared values need to be based on the cost of reinstatement in inflated prices and short supply conditions.
- ISR clauses, such as loss of attraction, and an excess buydown, which was new.