Inquiry into response of insurers to 2022 floods hears of concern for land buyers

A Queensland council inundated with floodwaters in the catastrophic 2022 floods has raised concerns about their struggle between building on cheap land while averting the risk of further flood-related catastrophes.

A Queensland council inundated with floodwaters in the catastrophic 2022 floods has raised concerns about their struggle between building on cheap land while averting the risk of further flood-related catastrophes, as it battles to meet crucial housing targets.

A parliamentary inquiry is underway to assess the response of insurers to the flood event that wreaked havoc along the eastern seaboard in 2022, resulting in 300,000 claims, a $5bn damage bill and thousands of residents displaced from their homes.

Dr Daniel Mulino MP is spearheading the inquiry. Picture: NCA NewsWire / Martin Ollman

The inquiry, spearheaded by Chair of the House of Representatives economics committee Daniel Mulino MP has brought to light a slew of systemic issues plaguing the insurance industry and local governments, including a disconnect between insurer and council flood data, policy clarity and a lack of consistency in flood risk measurement.

The first regional public hearing held in Caboolture on Tuesday heard from Moreton Bay and Sunshine Coast councils who revealed they were struggling to meet housing targets amid booming population growth, while also burdened by their own premium hikes.

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City of Moreton Bay Council representatives in particular raised concerns over the growing challenge of providing safe, affordable housing for an extra 12,000 residents annually, while keeping people out of flood-prone areas.

Moreton Bay council chief executive Scott Waters said it was incumbent on local governments to ensure they were approving developments at the highest level of infrastructure they could so that first home buyers could afford both loans and insurance.

Scott Waters called for a national approach regarding flood risk management. Picture: Glenn Campbell

He said a national approach that provides guidance and leadership to local governments on the frontline of flood risk management was needed to ensure correct land use and proper coordinated risk mitigation for future developments.

“Inevitably this will mean no-go for certain areas and land use in some areas,” he said.

“We have a very significant challenge ahead of us to meet the demand growth of 300,000 people in the next 20 years, it will be a huge piece of work for us to deliver, but we’re up to the challenge.”

Deputy chair of the inquiry Garth Hamilton MP said he was keenly focused on the growing bracket of Australians who were now unable to afford insurance and could not break into the tight housing market as they were more likely to purchase cheaper land.

“I kind of see that as being a key challenge for the country, how (councils) carry a lot of the burden for land development,” he said.

Groom MP Garth Hamilton. Picture: Kevin Farmer

“But how we balance getting those people the opportunity to buy a house, the Australian dream, but not put them in a situation where their vulnerabilities are exploited where they’re able to afford insurance … there’s a really thin little thread there.”

Further concerns were raised over the urgent need for comprehensive reform including the inadequacy of the outdated “one-in-100-year flood” concept, which fails to accurately assess the true risk posed by flooding events.

Instead, there is a call for a shift towards using percentages to articulate flood risks, with Mr Waters referencing a one-in-2000-year flood that hit the region in January.

Mr Waters also raised the need for a national standards approach to flood risk and mapping, noting the degree of local council flood zoning was “not necessarily the same as the insurance company and vice versa”.

The inquiry heard Moreton Bay council would soon enter into an Australian-first data sharing agreement between local government and a top Queensland insurer to help accurately identify flood risk and better understand premium pricing.

Speaking to media outside of the hearing, Dr Mulino agreed data sharing between insurers and government needed to be made available to the wider public.

“I think we probably need to disclose more than we currently do,” he said, adding that the hazard insurance partnership would lead to better data sharing and effective mitigation spending.

Councils agreed standardised retrofitting, buyback schemes and flood levees were the most realistic future mitigation options.

The inquiry continues in Logan on Wednesday.