00:00so we do have business insurance um but unfortunately like a lot of people around
00:06here when it comes to flood coverage it becomes quite difficult and quite technical
00:13um so you know we're just working with our insurance company and everyone around and
00:18doing the best we can okay joining us now is the ceo of the insurance council of australia
00:24andrew hall andrew good morning thanks for being with us good morning tom just off the
00:29back what we heard there from alicia for people who might not have seen the interview she
00:32owns a cafe in tari or almost completely inundated by water just picking up on what she said there
00:39do you think that's part of the issue we'll talk about under insurance and not having insurance in
00:43a moment but she seems to feel as though the whole system's a little bit too complex
00:48to navigate during what is already a very tough time well when it comes to insurance for business
00:55it's different to homes when you have a business you opt into things and one of the things you can
01:01opt into is often is flood and the challenge for insurers when we come to towns like tari
01:07is that we know that the main street floods and we know that those businesses will be wrecked by flood
01:14insurance is there for the things you can't expect to happen to your business
01:19and compensate you for that but when we've got businesses that are sitting in a five percent
01:26or a one percent aep so a chance that they're going to flood a 41 chance they'll flood in the
01:32next 10 years that becomes very expensive to calculate the insurance for this is why we've
01:38been having a very long conversation now over a number of years with both state and federal
01:43governments about what we need to do to build flood defences particularly for these regional cbds
01:49it's the same story whether it is tari camp c lismore gimpy meribar out there are so many places up and
01:57down the east coast of australia where we're looking at these cbds where there's been multiple flood
02:03studies done there's multiple solutions on how to protect these shop owners but we see very little
02:09action and very little investment happening okay there's a couple of things i want to pick up on
02:14there just first the issue of i guess either under insurance or not being insured at all
02:20is that becoming an increasing problem because these events are undoubtedly becoming more frequent
02:26yes so we are seeing a problem emerge around under insurance and that is driven not only by the
02:33events but by inflation so over the last three or four years building costs have gone up around
02:39about 40 percent and i think people are underestimating what it really costs to rebuild
02:44or restore your property after an event happens so we're seeing people who in their minds their home
02:50was insured they've insured their home for about five hundred thousand dollars when the rebuild comes
02:56it's often a lot more than that which is why we're now talking to state governments and we're seeing
03:01programs like one that was rolled out in ingham after the floods in january up there where the state
03:07government will give a grant to top up your insurance payout and you can build back better this is the
03:12key here we've spent a lot of money over many years in australia doing cleanup and we build the same thing
03:19back in the same location and seem to presume it's not going to happen again when we build back these
03:24properties this time around what we've got to do is invest more money into them so that they're more
03:30flood resilient the challenge in australia is that we put a lot of money into recovery we're putting a lot of
03:36money into long-term net zero projects which is important but we're not putting enough money into
03:42the here and now which is the resiliency mitigation because these events are happening now so we
03:48actually have to start getting particularly our regional towns and communities better equipped to
03:54be able to withstand these sort of flood and storm and wind events that are occurring so you you've
03:59obviously suggested there that when it comes to that preventative action you don't feel as though
04:04governments and authorities are doing enough i i want to ask you though andrew do you feel as though
04:09we've gone down the wrong path or too far down the wrong path now we've just got too many people who
04:16have built these homes who are living in these high risk areas and it's simply not possible to protect
04:21them all or get them all to move have we gone too far down that path look uh we've taken 200 plus years
04:29to get to this point and it will take a couple of decades to fix it up we know when we look at our
04:33peril data that insurers have and we've shared a lot of this now with the with the federal government
04:38there are 220 000 homes that were built in high risk flood areas on the east coast of australia
04:44220 000 homes that we know have a 41 chance of being flooded in the next 10 years
04:50uh amongst those homes we know that insurance rates are now sitting less than one in four
04:57uh we know that those people earn on average around about fifty six thousand dollars a year
05:02so in other words people who can least afford to lose everything are living in homes that were built
05:08in the wrong location and often have very little flood defenses available to them in many cases they
05:13have very little early warning systems that are working correctly as well so we're seeing what
05:18happened in the manning valley play out again where people are only getting limited warning and they're
05:23not able to move their their contents out of their home they're not able to shift their livestock fast
05:28enough um and they're paying a terrible price so there is a range of things we can do we put a proposal
05:34to both sides of politics in the lead up to the election where we said we need to build our flood
05:39defenses it's the natural thing that we should be doing in this country as we're facing into a climate
05:44future we've got to build up our flood defenses it's our biggest challenge and to do that we've got
05:49to work with communities they have to make the decision about what they want to do whether it's
05:53building a flood levy waterproofing homes raising homes and in worst case scenarios we may have to
05:59consider buybacks like what's been happening in lismore and in some of the suburbs around in and around
06:04brisbane these are all the things that should be on the table and it's a conversation we need to have
06:10but now when the floodwaters recede and all the volunteers and business owners and residents go
06:15in and clean up the insurers coming and do the rebuild uh we then the sun comes out and we get
06:20on with life we've got to break that cycle we've got to be having these conversations in the dry times
06:26as well as the wet times
06:27as well as the wet times
06:27as well as the wet times
06:27as well as the wet times
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06:39as well as the wet times
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06:54as well as the wet times
06:55as well as the wet times
06:55as well as the wet times
06:55as well as the wet times as well as the wet times.
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