Australia and New Zealand have the highest rates of catastrophic events in the world. In 2020 alone, we have seen flooding, bush fires, hail, cyclones and earthquakes that have destroyed and damaged entire cities, towns and ecosystems.

As surge events and matters of business interruption are increasing, let’s examine how the Asia Pacific region responds to these events and learn how a similar approach can be best applied no matter where you are.

Transitioning focus from post-event costs to prevention

In the past, catastrophe and natural disaster insurance have been the main policies focused on post-event costs, such as the cost of reconstruction following a disaster, losses from business interruption, rehabilitation for personal injury, and compensation which may be payable for loss of life.

Due to the variation, regularity and severity of these natural disasters and catastrophes, the industry has adapted to better implement stronger prevention protocols and risk management cost. This covers things such as back burning to reduce the risk of bushfire, managing building approvals on flood plains and building standards to minimize damage in the event of an earthquake. With this adaption of the industry has also come a rise in insurance costs, but for good reason.

Defining disaster

Australia and New Zealand’s insurance industries continue to evolve in better defining each individual disaster, and the varieties to allow provision for in policy cover. This was most prominently evident in the 2010 – 2011 floods in Australia. Previously, different insurance contracts had variations in the definition of ‘flood’, causing widespread confusion and perception of unequal treatment arising from policyholders’ misunderstanding of what was or was not covered. Clearer and more consistent definition reduced administrative burden and facilitated better expectation management for customers.

As natural disasters and catastrophes continue to change and grow within Australia and New Zealand, so too will the insurance industry. Better implementation of stronger prevention risk management cost and standardising disaster definitions have positively shaped the insurance industry and will continue to do so in the future.


Read more about how important it is to bring on the right team for crisis management.



For more great insights, whitepapers and case studies, visit our Insurance Carrier Resource Centre.

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Blog Author

Scott Newland

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