With 3 consecutive years of La Niña, Australian corporates are left with an unaffordable flood threat in the traditional insurance market.
In terms of tangible & intangible losses, flood is Australia’s costliest natural-hazard related disaster. Since the beginning of this year, Australia’s exposure to flash and riverine flooding has been relentless. As the BOM declares a third consecutive year of La Niña, the region is unable to absorb additional rainfall due to full dams and saturated soil, meanwhile traditional insurance capacity has all but dried up.
As a result, the spike in premiums (a 26.4 % increase in some cases, despite not making claims) is not the only shortfall in traditional flood products. Following the February and March 2022 floods in Queensland & New South Wales, there was a shortage of loss adjusters & specialist hydrologists needed to determine if the resulting damage was from fluvial or pluvial floods.
This had major implications on the sub-limits and deductibles of insureds’ traditional property policies. Fluvial flood cover was subject to a separate sub-limit and deductible, where the pluvial was not. This resulted in a 6 month delay in hydrologist review before a claim determination could be made.
Descartes’ flood insurance does not have these complications as both types of flood would have been covered under the parametric policy. Therefore claims settlement would be much quicker, with no questions about what was and wasn’t covered.
As flood exposures and losses are projected to increase – surpassing AU $8.8 billion in insured losses since 2019 – corporate clients can’t afford to remain uninsured. Parametric cover provides customized protection, with a flexible and straight-forward structure tailored to clients needs, risk appetite and budget.
Corporate clients can’t afford to remain uninsured – parametric flood insurance offers an alternative solution.
Curious about how Descartes can provide protection for corporate and public sector clients? Fill out the form to download to read our latest case study on Descartes’ parametric flood cover in Brisbane.