The Insurance Council of Australia (ICA) has outlined its response to key recommendations from multiple government inquiries following the 2022 South-East Queensland and Northern Rivers floods, the costliest flood disaster in the country’s history.
The newly released General Insurance Industry Action Plan details how insurers will address findings from the House of Representatives Economics Committee’s inquiry into flood claims handling and the Independent Review of the General Insurance Code of Practice.
The ICA had previously supported 78 of the 187 recommendations issued across these reviews. The Action Plan expands on this by outlining responses to the remaining recommendations, considering cost implications, regulatory constraints, and operational feasibility.
Of the 150 recommendations relevant to insurers, 109 have been accepted or accepted in principle, while 28 require further examination. Another 10 will be individually assessed by insurers, and three recommendations related to pricing have not been supported.
The ICA has stated that regulating pricing through the Code of Practice is not a suitable approach and that some of the proposed measures could breach competition laws. However, individual insurers have indicated they will continue reviewing their pricing models to align with consumer needs.
The industry’s response also incorporates recommendations from the Parliamentary Inquiry into the Impacts of Climate Change on Premiums and the Parliamentary Inquiry into Financial Abuse. Implementation of key measures has already begun, including revisions to the Code of Practice and the development of industry frameworks for supporting vulnerable customers.
Following the 2022 floods, which led to over 240,000 claims and $6.3 billion in insured losses, the ICA commissioned Deloitte to conduct an independent review. The resulting report, “A New Benchmark for Catastrophe Preparedness,” provided seven key recommendations for strengthening the insurance sector’s disaster response capabilities.
The ICA has since tracked industry progress in implementing these recommendations through a follow-up report, “After the Floods – Meeting the Benchmark.” The findings showed that insurers have made progress in some areas, particularly in governance and resource allocation, while more complex changes – such as technological upgrades and claims processing reforms – are still underway.
The ICA has also launched broader industry-wide initiatives, including a Disaster Response Charter and Playbook aimed at standardising insurers’ responses to extreme weather events.
ICA chief executive Andrew Hall said that the 2022 floods placed unprecedented strain on the insurance sector and highlighted areas needing improvement.
“The number of claims was unprecedented, and insurers were stretched beyond their limits, placing a spotlight on the industry’s engagement with consumers and claims handling performance,” he said.
He said insurers had engaged extensively with government inquiries and consumer advocacy groups to develop practical solutions.
“Through this Action Plan, we are seeking to ensure that customers experiencing vulnerability are appropriately identified and supported, insurers have the appropriate systems and processes to respond effectively to increasing natural disasters and provide the best possible customer experience, and that the industry demonstrates strong governance and is accountable and transparent,” Hall said, adding that affordability concerns remain a critical issue for the industry.
The ICA has committed to continuing collaboration with regulators, consumer groups, and government agencies to ensure the industry’s response aligns with broader policy objectives. Further industry adjustments are expected as discussions progress and additional regulatory recommendations are implemented.
