NSW Covid insurance claims set to grow as lockdown lengthens

Claims on the NSW insurance fund behind the Opera House, Taronga Zoo and the state’s galleries are likely to grow as Sydney’s lockdown seems set to drag on.

The Sydney lockdown will see insurance claims from the city’s big attractions, including the Opera House, grow. Picture: NCA NewsWire/Bianca De Marchi

Claims on the NSW government insurance agency behind the Opera House, Taronga Zoo and the state’s galleries have soared since November last year as the agency continues to cover losses arising from the Covid-19 pandemic.

Claims to the Treasury Managed Fund, which insures several NSW government agencies, have grown from $71m in November last year to a total of $176m by late June.

This was before the latest Sydney lockdown forced many significant NSW institutions and attractions to close, forgoing school holiday revenue.

The Treasury Managed Fund provides insurance cover to major NSW attractions such as the SCG, Taronga Zoo and the Opera House.

As of the 2020 budget the NSW government had indicated it expected up to $343m in pandemic-related claims to hit the fund.

Claims have been steadily growing during the pandemic as NSW government agencies, such as the state’s cruise ship terminals business, have remained hampered in their ability to reopen.

In a sign of the increasing damage, claims in June last year were just $37m.

The surge in claims comes as the NSW government is staring down the barrel at several more weeks of restricted activity across the greater Sydney metropolitan area. However, the growing claims bill for the Treasury Managed Fund comes at a time when the fund has reaped strong growth from the strength of investment markets

In the 12 months to June, the fund recorded a 17 per cent return on its investments.

However, the latest NSW budget papers also flagged a potential upside for the NSW government from its insurers, noting a non-quantifiable contingent asset from potential claims.

“The state has been subjected to business interruption insurance claims for financial losses during the COVID-19 pandemic,” the budget papers said.

“The state is expecting to receive further payments, however, is not able to reliably estimate the amount of any future insurance recovery payments.”

The Treasury Managed Fund, which at the end of April this year had $12.3bn in funds under ­management, provides broad cover to state agencies and does not exclude pandemic-related claims.

This stands at odds with the Victorian Managed Insurance Agency, which only provides cover on slim grounds in the event of a pandemic.

As of January this year, the Victorian government insurance agency had only paid one $15,000 claim.

This was before the state was plunged back into its latest lockdowns over the Valentine’s Day period and again at the tail end of May.

Originally published as NSW Covid insurance claims set to grow as lockdown lengthens