Bushfires: Grilling looms for insurers over emergency response

The heads of Australia’s largest ­insurance companies have been summoned to a crisis meeting in Canberra this week.

Treasurer Josh Frydenberg will meet major insurance companies on Tuesday. Picture: AAP

The heads of Australia’s largest ­insurance companies have been summoned to a crisis meeting in Canberra to focus on their performance and responsiveness to bushfire victims’ claims.

The insurers — including representatives from the Commonwealth Bank, Westpac, IAG, and others — will brief Josh Frydenberg on Tuesday. 

Collectively, insurers have ­received 5850 claims since ­November 8, according to the ­Insurance Council of Australia, with total losses estimated to have reached $375m.

However, both of these numbers will rise as residents from fire-affected communities return to their homes.

On Sunday assessors for most major insurers were still trying to access some of the hardest-hit ­regions in the southeast of NSW and parts of Victoria, though some remained too unsafe to enter.

Most claims — 87 per cent — have originated from NSW, ­according to ICA figures. Another 6 per cent have come from South Australia, 4 per cent from Victoria, and 3 per cent from Queensland. 

Some insurance leaders said they were sceptical about the federal government’s intentions and queried why a briefing on their performance was suddenly necessary. 

“In the current political environment this serves as a decent distraction,” an official said, adding that the Treasurer would likely emerge from the meeting with a hard line on how companies had been told to improve their performance. “I’ve never seen a politician pass up the opportunity to give the banks a kicking.”

Another insurance official said their company had been prioritising bushfire claims for months and dispatching teams of staff to find emergency accommodation for their customers. Confidential psychological counselling had also been provided.

Compared with previous natural disasters, the current crisis ranks at the lower end of total insurance losses, one official said. The 2003 Canberra bushfires generated $840m in damages claims. Losses from the 2009 Black Saturday bushfires in Victoria topped $1.7bn, while the damage caused by the Ash Wednesday fires of 1983 ­remains the highest at $2.5bn.

Mr Frydenberg said the “sole focus” of Tuesday’s meeting would be to ensure the companies were responding to customer concerns as expeditiously as possible.

“We will also discuss any support the industry requires to ensure that it can respond as quickly and effectively as possible to those Australians who have suffered losses, and who are now looking to their insurer to process their claims so that they can begin to get back on their feet,” he said.

In response to recent bushfires in the US, some companies have reportedly reduced the number of insurance products available for homes and businesses in fire-prone areas, leading to fewer ­options and higher prices.

Campbell Fuller, spokesman for the Insurance Council of Australia, said that was an unlikely scenario for Australia, even if temperatures and the fire threat continued to increase.

“The insurance industry says no part of Australia should ever be uninsurable so long as governments do the right thing and invest in community level and property level measures to reduce the risks,” he said.

Mr Fuller added that in order to achieve this standard, it was incumbent on politicians to refocus their priorities on disaster prevention and community protection.

“These bushfires reinforce the industry’s long-held view that governments need to be proactive in natural disaster prevention.”