Australia has been hit with one of its worst natural disasters... so where's Leo when you need him?
Background: In the past two weeks, Australia has been hit with one of its worst natural disasters. And Suncorp, which also owns insurers AAMI and GIO, has been hit with over 34,000 house insurance claims.
What happened: But that ain't it. They expect another 10,000 claims to still come through from the recent floods. And although Suncorp jacked up its prices by 7.5% last year, it’s expected that this will increase again.
What else: The main reason? Approximately 7 per cent of households have flood risk... and climate change is causing more frequent natural disasters. Eeep.
💡 The bread and butter for insurers is pricing 'risk'. In other words, using complex algorithms to assess the likelihood of an event occurring… and the financial impact that the event will have.
💡 This is often based on historical data. But in a world of climate change, where there is no historical data, calculating the impact of natural disasters becomes a LOT harder.
💡Case in point: Five years ago, Suncorp expected $600m worth of damage from natural hazards. This year, it put aside nearly $1 billion. And they reckon even more will be needed in future years
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