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Thank you, Councillors. I'd start by acknowledging Indigenous heritage. Hawkesbury City Council acknowledges the Dharug and Dharungjung people as traditional custodians of the land of the Hawkesbury. We pay respect to all Elders past and present and emerging, and acknowledge all Aboriginal and Torres Strait Islander people as First People of the country. Thank you, Councillors. I'd start by acknowledging Indigenous heritage. Hawkesbury City Council acknowledges the Dharug and Dharungjung people as traditional custodians of the land of the Hawkesbury. We pay respect to all Elders past and present and emerging. Good to go now? Good to continue.
General Manager. Thank you, Mr Mayor. Members of the public attending the meeting are advised that in the event of an emergency, you will be asked to proceed in an orderly manner to the nearest exit following the guidance of our warden. I would also like to advise that in accordance with clause 5.34 of the Code of Meeting Practice, meetings of the Council are recorded. In the terms of the Privacy and Personal Information Protection Act, this may involve the recording of personal information provided at the time of the meeting. The recordings are made to assist staff in compiling the minutes of the meeting and to enable the podcasting and livestream of Council meetings. The provision of any information that is recorded is voluntary.
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Thank you. First I'd like to welcome the people with us today, Liam Walker, who will be on our screen in a little bit. We're just rectifying that. Welcome, Liam. Mark Harvey, representing the police here today, and Jonathan Hill from the RFS. And welcome, councillors. Is there any apologies?
Would someone like to move that way? Councillor Veigel, Councillor Reardon. Those in favour? Against? Carried. Declarations of interest, councillors. Is there any councillors that wish to make a declaration? Thank you, councillors.
Okay, we've got a recommendation. Before we go to that, we've got Liam on the screen, and he's going to address us on some matters today. Liam, would you like to take the reins?
So we were approached to present to council and principally the questions asked were, you know, how insurance industry determines premiums, and what flood information, you know, is used to determine risk, particularly whether an alteration in flood planning level has any direct impact on insurance premiums. I've got a presentation here that I'll — I can't share while someone else is sharing the screen. So
I've just sent that through. While we're working through that, I'll introduce myself properly. My name's Liam Walter. My role at the Insurance Council of Australia is Director of Mitigation and Extreme Weather Response. My team and I are sort of the ones on the ground following disasters, coordinating. The insurance industry response and, you know, providing liaison function to all levels of government as are needed, and other key stakeholders . The Insurance Council, for clarity, is the peak body, the representative body for the general insurance industry in Australia. General insurance is, I say, insurance stuff, so houses, cars, businesses, that sort of thing. It's not health insurance or life insurance, those sorts of products.
Our members make up over 90% of the many tens of billions of dollars in insurance premiums written every year. Our purpose is to be the voice for a resilient Australia. All of our work ultimately lines up to that purpose. So really grateful to be able to present to you today because the questions that you've asked around, you know, premiums and risk are all sort of vital elements to discuss in the broader conversation on resilience . How are we
Going with the slides there? Liam, I'm still waiting for the email. Just trying some other options as well. Well, rather than— Can you try sharing now? Your own presentation? No. Oh
Talked about the Insurance Council of Australia there. So, you know, three broad categories of things I'll speak to: risk, costs and insurance premiums. Then specifically around flood, NFID and some case studies. NFID is the National Flood Information Database. And then at the end, just briefly sort of talk to our advocacy in relation to natural hazards. So there's five key areas that— Excuse
Yeah, no worries. Apologies for the muck around. So there's five key areas, really, that are impacting, or always impact, the cost of insurance. One is worsening extreme weather, or extreme weather always impacts premiums, but worsening extreme weather is creating even more pressure. Unfortunately, you know, over the last several decades, we continue to see more people in harm's way. So developments, you know, in flood-prone areas is a key example. A more recent phenomenon being really significant inflation across the economy. So the cost to repair and replace has , you know, grown quite markedly in building costs alone in the last five years. I mean, in some segments, you know, you look at almost doubling of costs, about 60% overall.
Increasing value of assets, so particularly homes overall has some effect on ultimately supply chain and the ability to meet demand, which also drives costs up. And then taxes on insurance. So nationally , GST obviously is 10%, stamp duties around 10% across each of the jurisdictions, and unfortunately in New South Wales, you're stuck with an ESL as well. So, you know, it could be anywhere from between 30% and 40% of the price a customer pays for insurance is tax. Tied up in taxes.
If we, this one would have been, this one will be a good one to loop back to. When we look at the average now, I can't stress enough that I'm talking about average here. When we look at a breakdown of the premium, we're looking at about 60% sits in claims cost, and this is where sort of the flood risk, you know, or the bushfire risk or the cyclone risk or the burglary risk sits, is ultimately in the claims cost, and that's what insurers are sort of ultimately trying to get to when they talk about risk, is that, you know, what's the likelihood that a claim is going to happen and what is that going to cost? It's about 60% of the cost of insurance, and this is an average, national average over the last five years, sits in that claims space.
About 13% is in expenses. 20% is the average that's taken for tax, although, as I said, in New South Wales it's a little bit higher than that. About 7% average over the last five years is in reinsurance. So this is the huge capital allocations that insurers access sort of insurance for insurers, if you like. And actually over the last five years in the home space, insurers haven't made any material profit when averaged over the last five years.
The cost of extreme weather over the last several decades. So if we look at the 2000s, you know, sort of in the order of averaging a billion a year. When we get to the 2010s, we're sort of at around two and a half billion, and then into the 2020s we're at about four and a half billion. The most significant growth in claim costs, or the costs, is in the flood. Peril . So peril, so it's a bit of insurance lingo that I'm using there. We, you know, refer to floods, cyclones, bushfires as perils, a bit of insurance talk there. But bushfire has been a bit up and down. Storm has been fairly consistent. Hail has grown fairly significantly. Cyclones a bit up and down. But the really big news there is flood.
We look at the last, or sort of since 2020, you know, that 2020s period, there's been around $23 billion in aggregate insurance losses during that period, or insurance costs related to those events, which is almost double what it was in the previous five years.
So I guess, you know, what does all of this mean? I talked a lot about sort of the costs that are driving into, you know, insurance costs or the price of insurance. Let's sort of dig a little bit further into flood. Our sort of key advocacy ask at the moment with the federal government is very significant investment into flood mitigation nationally. We're talking, you know, $30 billion over a number of years. We've identified 242,000 homes across Australia that are at the highest flood risk, and about 186,000 of those homes are not insured. So I think when you start sort of absorbing those numbers, you know, and the costs, you know, spoken to there, there's a significant burden on communities, states, you know, federally, in relation to those homes that aren't insured .
And mitigating against those losses, you know, is essential at this point. It's only going to get worse. When we talk about the highest levels of flood risk, we're talking about, we call it extreme flood risk and severe flood risk. Extreme flood risk is a one in twenty event .
Okay, brilliant. Okay, here's my first couple of slides. So these were the five areas, just to do a little bit of a recap. You know, the five areas, I guess, that we're focused on when we talk about factors that always impact the price of insurance, but in particular, you know, in the last several years of driving insurance prices. So worsening extreme weather, we've got more people, you know, built in areas that are, you know, exposed to flood risk, but also, you know, bushfire and cyclone risk as well. Broadly, demand and price inflation is putting upward pressure on costs and taxes. This is the pie chart that I was speaking to before. So the lion's share, again, this is average, you know, national average, a lion's share of the insurance premium, or the price of insurance, is around those expected claims.
But, you know, there's certainly, you know, the expenses and tax and reinsurance and material there. Again, over the last five years, there's effectively been zero profit. In any given year, that's up and down, but over the last five years, that's where it's landed from the home portfolio
I spoke to the cost of extreme weather. So again, you know, we look to see the chart there, the 2000s, 2010s, 2020s, significant increase in the overall cost of extreme weather there, the dark blue being the flood being, you know, the real standout peril as well, but certainly flood. is very significant.
Looking at the, focusing a little bit more on those 2020s, again, that five years, sort of since 2020, is almost double the cost incurred in the prior five years, being the key takeout there. And then if we focus in a bit more on flood, our key advocacy platform in relation to resilience is the Flood Defence Fund, 242 homes identified nationally at that extreme or high or severe risk, 186 of those aren't insured. Now, if not the major reason for that, if we see, you know, the point down there, you know, premiums often exceed $7,000, and in higher risk areas, $30,000, and even well beyond that happen as well. There's, you know, under no illusion that that will be, you know, a key reason why 186,000 of those homes aren't insured. Twenty-four catchments have been identified as priorities in that flood defence, and Hawkesbury River is one of those.
A really important slide , not seen it, but in terms of framing. Flood risk. We really need to make sure that we're talking the same language and on the same page. Extreme flood risk, severe flood risk, one in 20, one in 20 years for extreme flood risk, one in 50, one in 50 years. You know, flood risk is terminology that gets thrown around. If we look at extreme flood risk, there's a 5% probability each year. So that's the AEP, average exceedance probability, which is sort of another term that's used. When we roll that forward, a property that's in a one in 20 zone, a 5% AEP, there's a 22.6% chance of flooding in five years, and you're up to 40% chance in a 10-year period. And the same sort of played through for a one in 50 there, which is a 2% each year, 9.6% over five years and 19.3% over 10 years.
I think, you know, a way that I kind of look at this is if you're in a one in 50 zone, you know, you're reasonably lucky if you didn't flood, you know, in a 10-year period. I mean, 20% is fairly high. Certainly if you're a one in 10 , yeah, it's virtually a coin toss. And certainly if you flooded more than once, you know, in that 10-year period, then I'd say that's a bit unlucky, if you like. When we're talking about insurance products, we're talking about a policy period of one year. So that average exceedance probability becomes really important, that 5%, 2%, 1% for the one in 100. If, you know, there's that level of risk, and on a further slide you'll see that it sort of goes even further beyond that.
When we're looking at price, or, yeah, price, property characteristics matter, so the age, construction, type of construction materials. The proximity or risk of a natural hazard is obviously a really key element. The sum insured that's selected matters as well, and claims history, you know, can also matter as well. So, you know, primarily what we want to focus in on, sort of from here on, is around this natural hazard sort of risk. So how is flood risk assessed? As I sort of indicated before, a really key element to that is understanding what the average exceedance probability might be at a given property. The National Flood Information Database is a service that is run by a company called Risk Frontiers.
The Insurance Council had a role or played a role in kind of bringing that to life when it first came to be. But the Insurance Council does not own that data. It doesn't license that data to our members. We sort of, I guess, act as a coordinating body, as we do in many other things with our members and Risk Frontiers, who provide that service. It's super important that local governments, who typically are the holders of flood information, flood studies, are providing that to Risk Frontiers to ensure that the NFID, as we call it, is as up to date as it can possibly be. It is a key source of information that insurers will use to assess flood risk. Now, there is not a binding requirement or other kind of requirement for insurers to use that information.
Insurers may choose to also have, you know, similar capability internally. They may have hydrologists and, you know, meteorologists and engineers and all manner of, you know, capabilities that they bring to bear on pricing in addition to NFID data. But it is a significant source and aggregation of flood information.
Good news is that version 15.1, which is the current version of NFID, has the 2025 maps for your region included. Any changes that are made to flood studies or new data must be, you know, provided through to NFID and there's, sorry, to RiskFrontiers, and then, you know, there's a process, you know, to integrate that into their sort of quarterly version cycle.
One of the key bits of information that is missing, so is currently not a standard . Data point that's captured through flood studies, sort of for obvious reasons, I guess, given how, like, the effort that's required, but is finished floor height or habitable floor height, any number of sort of different terms there. That information
Is very important or very influential, potentially, on the risk rating of a property. So what do I mean by that? Generally, the flood height is measured from the centre of a property. If the property is very steep and there's flooding at the lower side of the house, is up the top there, the building itself might not actually be subject to flooding up to a certain level. However, at the centre of that bit of land, you know, the floodwaters get there. In those sorts of situations, customers are absolutely encouraged to have a conversation with their insurer or another, their current insurer or another insurer. A similar situation may also arise where a home is raised, you know, above that ground level.
In the absence of that finished floor height or habitable floor height, you know, data, insurers typically, you know, are using that centre of the parcel height. So customers are absolutely encouraged where, you know, it's, well, in any situation.
Going to let me be clear, but certainly where the home itself is not subject to flooding or the typical flooding for the reasons that I mentioned. The other point that I wanted to call out is, and happy to be corrected if I've got this wrong, but there were no floods between, or no major floods certainly between 1992 and 2020. And I suppose the reason why that is important, was important to me, or an important point to make is if you sort of flip back to, you know, this average exceedance, you know, sort of probability here, you know, that anyone that is within a region that is exposed to flood, those sorts of flood risks, you know, no flooding for, or no major flooding for 28 years sort of is extremely unusual as opposed to it being the norm, I suppose.
So that was a really interesting point, noting persistent drought conditions and, you know, various drivers for that, but that not being characteristic is the key.
Now this is where we can sort of get into some, I like this one because we get into some numbers, and I think it helps to sort of show how some of the numbers correlate and work to build a premium. Now this is from an example location in Queensland. So if we have a look, sort of move from left to right. The ARI is that sort of one in, you know, one in 20, one in 50. So we've got 10 through to 5,000 there. So that's important to note. The, you know, equivalent average exceedance probability is sort of called out there as well. The flood height at each of those flood event is also there, and the percentage of damage. So it's a $600,000 some insured percentage of damage there, you know, sort of rolls through to, you know, what the damage bill would be at each of those levels.
So I think the thing that I call out with this one, first of all, is there is a price, potentially , certainly at least in this example with this example property, there is a price that insurers calculate for a one in 5,000 event,
Average exceedance probability of 0.02. You know, for this building, which is $600,000, you know, some insured, let's say the $600,000 to rebuild, it's 54 bucks. You know, you need to set aside $54 to allow for that eventuality. Now, albeit an extraordinarily rare eventuality, but, you know, a model eventuality all the same. And if we work down through, obviously, what I hope would sort of make intuitive sense is that as the likelihood of these floods increases, the premium, you know, the cost that would need to be set aside also increases. So, you know, in this case, you know, this building is exposed to a one in 10. So 10%. So it's, you know, extreme flood. Now, the premium that is being generated there is $10,326.
Now, keep in mind that is for the flood, you know, the flood damage that might occur at this property. If we, you know, remember back to the pie chart at the beginning, you know, the claim cost, if you like, the claim cost element that needs to be allowed for is 60%, of which flood is sort of only one element of that. So, yeah, I would say that the price that a customer would be quoted on this basis, you know, would be well, you know, well over $20,000. But then as we move further to the right, we've sort of got a 50-year levy, so being a levy that protects up to a one in 50, or a 2% AEP, and similar 70, 100, 200. You can see as you move from right there, you know, for those floods that fall below that level, the dollar value that has to be allocated to those becomes zero.
And this will look different, you know, for every location, for , you know, for each property . So by location, I mean every sort of floodplain or catchment, and then for each individual property. But its purpose is, I guess, to sort of demonstrate how those numbers translate into. You know how a premium or that element of the premium might be calculated. In this example, you know, the interesting points to call out, you know, in terms of the premium is you get quite a significant leap or reduction, you know, from no levy to a 50-year at more than halves. And then, you know, by the time you're sort of getting to the 1 in 100, 1 in 200, certainly there's a, you know, $500 associated flood premium.
There's certainly nothing to sneeze at. But you're already at, you know, more than 80% reduction on the flood premium element. The flood height, there's a 10 centimetre , you know, difference, I mean, on a levy that's a couple of kilometres long potentially. You know, that, you know, is a cost-benefit analysis, ultimately, that needs to be done there. Insurers are, you know, this is a fairly crude table, but this is what insurers are doing every day, every time they're calculating a premium for, you know, individual addresses. You know, an actual example. Roma in Queensland is often used example, you know, of successful mitigation following the levy that was built there. Premiums dropped an average of 34%.
Some... You know, significantly more than that 34%. The higher risk, the higher the risk, you know, category, the more the reduction would have been. Now, you know, there's some significant challenges in Western Queensland, you know, around insurance pricing at the moment. And as you recall, when we, you know, started out those five areas of interest, yes, there is a levy that is, you know, providing significant protections, is more than, quite a bit more than 10 years ago now. You know, during that time, rebuilding costs have more than doubled. So these are factors that need to be considered, you know, when looking over a long period of time. The underlying flood risk has certainly been reduced, but factors like inflation, and especially given the inflation over the last several years, can unfortunately erode that.
To say it in a different way, notwithstanding there are price, you know, affordability challenges in Western Queensland, they would be significantly greater in the absence of that levy.
And then. To kind of wrap things up, I've spoken about our flood defence fund being our really sort of key area of advocacy focus with the Commonwealth Government. I guess the sort of key message really here is it's all about exposure. It's all about exposure to the hazards. The best way to improve affordability in areas that are exposed to hazards is to reduce the exposure to those hazards. And then in New South Wales being a separate case, a special case with the ESL, you know, that needs to be seriously reformed there, seriously quickly because, you know, those in New South Wales are sort of paying well more than other states and territories.
Yeah, land use planning is going to be key. So not just funding, you know, levees and diversions and, you know, all of the big ticket infrastructure, but land use, you know, needs to fall within that scope of consideration. We think that this is a really challenging one in the current environment with the cost of housing being so high, cost of building a home being so high. But if you are going to You are going to build where there's a flood exposure or a bushfire exposure or cyclone exposure, whatever it might be. You know, we think that those homes ought to be built to a higher standard, to be resilient to those hazards . I talked about data and flood mapping, so it's fantastic to see that there's, you know, like a recent study .
I think there's sort of love to have more conversation around that floor height, finished floor height, habitable floor height, whatever we might call it as well. There's a real opportunity there to, you know, our insurers to sort of sharpen the pencil as well.
That covers my slides and the information that I wanted to present today. I'm not sure how your proceedings allow for it or otherwise, but I'm happy to stay on and if there's questions, or I'm also happy to take any questions on notice as well. I can provide, well, I've emailed it through. If that hasn't come through, I can separately provide a copy of that presentation for the committee members as well.
What that means? Yeah, yeah, okay. So, again, this example—so this is the slide that you want. So again, this is an example from Queensland. Given the detail, this goes into, I can't say where or what property, but this is a location in Queensland. This is an actual property. And what this is setting out is essentially a premium table. So to distinguish premium and price, when I talk about premium, that's sort of these technical numbers. The price is what the customer might pay. So that's where, you know, those expenses and taxes and that sort of thing come on. So this is a premium table for an actual property for the flood component of it. So what it's setting out is, you know, at each of the different severities of flood, how much would the damage be, and then what would the premium that we need to charge to account for that risk. Okay
Thanks for that, Mike. The reason I mentioned it, the word levy too, and then you went on to the next screen. You started physically talking about levies on property, physical levies. Yes. The SES must love you. The levy's in relation—it's a premium. It's just using the word.
That's what you went on to next, and that's why I wanted you to clarify that. And in one— and the reason I mentioned it is because with some of the wording that the SES use in relation to flooding issues, they're very particular in the words they choose that may relate to another conversation other than what they're talking about. Levies in this case would be one of them. The other one is you've got extreme for a one-in-20-year event . And again, talking in your language, extremes is in relation to the cost because it's very low when it goes under Ofat. Extreme in relation to flood mitigation is the opposite. So when you get, you know, it's a higher
That when we're talking to the public generally, and it's the SES who do that, when they talk about extreme, we're talking about over a 50-year event or greater than that. Where we're talking about cost , where the cost is is something that goes under every other day. So that's a
Thank you, Mr Mayor. Thank you, Liam. That was a great presentation. Just when you were speaking about the individual habitable floor heights on individual properties, and that the insurers have requested that sort of data, is there a resistance to providing that from local government, or is it just merely that it's a big job to do
It's a, yeah. So I wouldn't say that there's been resistance to it. It's a very significant undertaking, I think is the challenge. And insurers recognise that, certainly. In Queensland, they're looking at trialling some LiDAR-type technology approaches with the understanding that it's not going to be, I mean, nothing in this space is going to be 100% accurate, I suppose, but there'll be a reasonable margin of error with it. But there is some work happening to find out more efficient, you know, ways to go about the task. But it's certainly recognised it's the labour and accuracy of actually doing it that is a key challenge. Oh
Thank you. So essentially, though, if that were available, that would allow more individualised risk to be determined for individual properties. So that would eliminate, and you can correct me if I'm wrong, that premiums are put across either postcodes or specific zonings or specific flood level heights. Is that correct? So individual properties can be assessed and determined for their individual risk.
So properties are assessed on their individual risk . At the moment, what it would do is improve the, I hesitate to use the word accuracy of that, but it is in a sense, it would improve the personalisation of that property where the flood height is taken at the centre of the property and the habitable floor level happens to be the centre of the land parcel, where the habitable floor height is higher than that because it's at a higher point on a property that has, you know, some elevation to
It or that it's on stilts. That would effectively change the flood height at that property. Okay, thank you. Mr. Mayor, if I may ask one more question, is that okay? Thank you. With regard to your advocacy and what you're doing about stronger homes through building standards, would it be advantageous to have those sort of standards, is it better for our residents, for example, to have those standards codified into our planning documents? So would that give weight within the insurance industry if we had stronger codes around building material and stronger requirements of building standards?
That is most certainly something that we would love to talk about further. We need to get into the nitty-gritty of all of that to understand what it might mean, but that's essentially what we're talking about. Our advocacy has primarily been at the National Construction Code at this point, but certainly any local government... that is looking to strengthen, you know, their planning, you know,
Thank you. Councillor Ryan. Thank you. Thank you, Liam. Mate, just asking a question in relation to the SL. Just at present, that's impacting on homes at 18% here in New South Wales, and other businesses 34%, and it's raising approximately $1.318 billion a year for the government to use on these. And I don't want to go into the emergency service levy, but is the Insurance Council pressuring or doing what it can to get the state government to reduce this, knowing that we do, because of this, and it's stated here, that we are not—there are people out there that can't afford to insure their houses because of this. When they have an issue, it comes back onto the residents, to the taxpayers of state or federal government. Is your people doing any work with that?
Look, absolutely. So prior to the last state election in New South Wales, you know, our election platform, you know, of advocacy, if you like, that was sort of front and centre. So we're having ongoing, you know, ongoing conversations with the New South Wales government around that. You know , without getting too political about it, I think it's important to sort of call out that states and territories and the Commonwealth government collect about $9 billion, or might be slightly more than $9 billion, in tax annually on insurance products. So, you know, things like, you know, reducing those taxes in the first instance, but then advocating for multi-billion-dollar, you know, resilience... Programs that will ultimately protect Australians and, you know, make the insurance costs more achievable. We don't think that's too much of a stretch to ask when the tax revenue is as high as it is.
Just one more, if you wouldn't mind. Is Hawkesbury Council supplying data, and we'll probably go back to our Acting General Manager, the National Flood Insurance Database? Is that something we do Mr General Manager, or would you know that, Liam?
My understanding—I'm happy to have more of a conversation about this and any sort of future plans that there might be and cadence of updates. My understanding is that the most recent studies are from 2025, and that they are included in the most current NFID.
Councillor Vogel. Somewhat camouflage over here, Mr Mayor. Yes, you are. I'll roll overlights in front of over here in the side of the chamber. Thanks for the presentation, Liam. I appreciate it. Specifically, I just want to pick up what Murray said. You're looking at maybe individual properties. Clearly, partner insurance companies don't look at individual risk because if you go and have a look at— they're not insuring suburbs in this place based on postcode. So to turn around and say you're looking at an individual property is a bit of a long bow, as far as I'm concerned. But I don't expect you to answer it, but that's just the fact of life. Budget won't insure the Hawkesbury. UWI won't insure the Hawkesbury, and I'm sure there's other people that won't insure the Hawkesbury.
IAG won't insure the Hawkesbury unless you've already got a flood policy. If you take it off there, and they'll take it off, they'll give you storm and cover, but they won't insure for flood if you want to come back on it. But that said, and we all know that around this, but specifically I just want to ask the question. If this LG, if this local government area changed the flood level to their building code, will the insurance companies look at that and change the risk premium to increase it? Do you look at that specific data and saying, yep, we know where you are, that's where the building level, at the present time, anything below that, your premiums go up?
Yes, I don't, without having the actual data, it could well be the case that insurer A and insurer B aren't writing business in a particular location. Those insurers that are writing business will generally do so on a case-by-case basis. What we do find is , relates to what I'd mentioned before, you know, about that centre of the property versus finished floor height. Customers can receive a quote, property owners can receive a quote that is priced on the basis that the property floods, that the building floods, which isn't the case because there is such a difference between it and the finished floor height level. I just want to provide those clarifications. That doesn't take away at all from the point that you make that a number of insurers aren't writing business and that affordability is a challenge. Except that that's the case.
You're talking about planning levels, it doesn't really have anything to do with what insurers are going to do, and maybe I'll try and use the, you know, this table that's on the screen there. If the planning level ,
The flood risk is what the flood risk is. So if we look at the no physical levee protecting there, I mean, this property here, all of the bosses there for all of the different floods, you know, rolled down to 10, 10,000. The planning level has no effect on the risk of a flood, you know, to a property. So if, you know, that existing property there, a one in a hundred, the planning level was one in a hundred, say, I mean, it's still exposed to the one in 10. You move the planning level to one in 200, it's still exposed to all of those floods, you know, below that level. So the planning level doesn't have an effect. It's what the actual flood risk is on a particular parcel of land. Does that make sense?
Thank you, Mr Mayor, and thank you for your presentation, Liam. That was a wonderful oversight of things more broadly. But if you don't mind, is it okay if I ask some questions for the Hawkesbury? Because I think that's where our acute interest does lie. Of course. Just quickly, you touched on flood mitigation, and that's something that a lot of us here in the Hawkesbury, especially the elected representatives, are very interested in. We do have very varying opinions in this room. I understand that you are more the policy and advocacy body for the industry, particularly not an insurer yourself. But I was hoping to get some more information on that level of advocacy for flood mitigation because after the eight or so floods we've had here in recent times, that cost of the recovery and the rebuild for communities, rather than investing the money upfront in mitigation rather than recovery, is something that we are quite keen to explore.
Can you let me know where your advocacy is at, especially to the federal government, about ensuring that there is a significant investment in mitigation rather than recovery
From the pot of recovery to the pot of resilience, because it's sort of, you're robbing Peter to pay Paul at that point. There's going to need to be substantial funding now and into the future for recovery. There's always going to be, you know, some level of exposure. It's around what's that balance of safety, you know, a protecting property and that sort of thing. I am a little bit concerned at some of the announcements that have been made recently around the disaster relief funding arrangements, DRFA. I haven't quite landed on what the impacts to that might be, but I'm a little bit concerned to sort of kind of give a preview of our thoughts on that, or my thoughts on that, that there might be a reduction in funding, which certainly is not what we think is necessary.
In respect to resilience funding, we think that there's quite a bit of opportunity in the Disaster Ready Fund, and have been sort of talking with NEMA and, you know, lobbying the ministers around... You know, really starting to use that funding for, you know, shovel-ready projects, for want of a better way to put it, that, you know, there needs to be levees, diversions, houses raised, buybacks, you know, these types of things. Whichever is appropriate in each, you know, community, that that's where that money needs to be spent. This is where a lot of the focus of, I'm not sure you may have heard of the Hazard Insurance Partnership. This is sort of the formal engagement the insurance industry has with the federal government, and there is some progress, albeit, you know, slower, I think, than everyone would like there.
And then, you know, then more broadly, the Flood Defence Fund, which speaks to each of these catchments. Happy to provide some more meat on that bone sort of out of session offline. I can send that through, provide a bit more detail around what we're asking for there, but that's, you know, a very significant investment. I think there's an opportunity to have a conversation around the Disaster Ready Fund and sort of future submissions to the Disaster Ready Fund if Council has, you know, sort of projects that, you know, are thought through and, you know, possibly. Ready to go, but for having the funding. I think there's a conversation to have there around how we might be able to support advocacy on those specific projects through the Disaster Ready Fund.
Thank you. Just two very quick ones, Mr Mayor, to go. Thank you for answering that one in relation to federal government. My next one's about the state government. And when there was a change in government at the last election, the Premier announced that both the Hawkesbury and the Northern Rivers, particularly Lismore, would be the first regions in the state to have a DAP, a disaster adaptation plan. I think we were promised that to be ready by June last year, I think it was, through Reconstruction New South Wales. Obviously that hasn't eventuated. Do you have any—are you working with or aware of what's happening with the state government and in terms of the DAP here for the Hawkesbury? Because that is a severe mitigation measure in lieu of raising the Warragamba Dam wall.
And the Premier also said that he was going to make an announcement—well, he did make an announcement—for potential levies, with no detail to date. So based on that, I just wanted to know if you have any further information on the DAP for the Hawkesbury.
So we've certainly, New South Wales Reconstruction Authority are a key stakeholder of ours. So we have, you know, engagement with them across all manner of things. And certainly the Northern Rivers and Hawkesbury disaster adaptation plans are things that we've been engaged on in terms of, you know, next steps and timings on things. You'd have to direct that to the Reconstruction Authority.
No, that's fine. Will do. My last one very quickly is about our residents and our community. So obviously after the last few floods where the insurance bodies assess the risk, especially in our floodplain, being the third oldest settlement of mainland Australia, we have a lot of homes on the floodplain that just it's impractical to move them. They're people's assets. It's their biggest asset they have in their life. And the premiums went through the roof, tens of thousands of dollars higher in premiums overnight. All of us here have told stories about how community members come up to us in tears that they cannot insure the biggest investment they've made with their wealth. What's the plan to address that?
Because I know on your website that one of your purposes or your core values is that insurance is accessible for all Australians, and we have so many in our community who will be unable to afford insurance in perpetuity. How are you going to address those issues where those homes can't be moved, they can't be raised, the government won't buy them back? What's the plan there?
It doesn't go unnoticed or unacknowledged, certainly with myself. I'm out on the ground, or at least my team are out on the ground, you know, after every major disaster, and we see firsthand, you know, the impact in communities of the disasters themselves, but then certainly, you know, the shock that can occur from, you know, that insurance quote or renewal coming in and going up. I just want to acknowledge that challenge.
We're very clear on what needs to happen here in New South Wales in particular, but nationally, the taxation on insurance is a deterrent to insurance. You know, it could be up to 40%. You know, some of the folks that you're mentioning there, 40% of the quote. Now, I get on a $40,000 premium, potentially it still makes it unaffordable, but, you know, on a $40,000 premium, you know, that's a significant amount of money. $16,000 the government's taking. So there needs to be tax reform. And again , when we add up all of that tax revenue, it's, you know, $9 billion a year. But that money needs to be funded, or rather there needs to be programs stood up immediately. To start and address exposure to these hazards.
Now, when we get, I think the key thing here is that, yeah, we talk about mitigation projects and $30 billion of mitigation projects. As you point out, we recognise that there needs to be local
Solutions and the local dynamics. There's communities that have been established for generations and generations that just don't want to leave. We need to figure out how to protect those. In other cases, it might be buybacks, you know, that are required, and others it's raising homes, and in others it's, you know, it's levies and the like. But the key is there needs to be commitment across all levels of government to fund it, and where, you know, we'll continue to have that conversation with the federal government. But that's where it starts, is taxes is the quickest and easiest way to impact affordability of insurance. The big challenge is reducing exposure to hazard because without that, it's just kicking the tin down the road.
I, after one of the many floods we had over the last few years, I had a conversation with somebody who lived right on the river, and their property had been damaged over and over, but they wanted to live there. They still, despite having all of that loss, they still wanted to live there. So they had—so they, when they rebuilt for the however many time, they built their kitchen out of concrete . It was, you could hose it out, which I thought was not that appealing, but apparently that was what they wanted to do. And I was talking to this fellow, and he was describing a conversation that he was having with an insurer that was keen to insure that property, given the fact that there wasn't carpet to be dragged out and put on the street or gyprock to, you know, disintegrate.
You know, being in disaster-affected communities sort of in the immediate aftermath and for periods longer, I would say that it is increasing based on my experience. And my advice, you know, without exception to anyone that I encounter is to have the conversation with your insurer. I think the key thing that I'd sort of call out is that the solutions have got to be—
The solutions at individual properties need to be matched to their individual exposure to a hazard. I certainly wouldn't recommend someone that is sort of on the river bank, for whatever better way to put it, you know, that is frequently exposed to floods. I certainly wouldn't
Straight off the bat recommend that they're doing things like removing carpets because, you know, for concrete and that sort of thing, because that's not necessarily what's driving the cost, you know, at those higher, you know, levels of flooding. There may be some benefit, you know, there may be some benefit to it, but, you know, depending on the type of construction, raising, you know, is probably going to have, you know, more of an impact. Regardless, these are conversations that can be had and should be had with insurers. And, you know, in many situations, that case that I spoke to before around, you know, if your property is at the high side, your building is at the high side of your plot of land, you know, that's a conversation to have straight away.
Or if you're on, you know, might be around the middle of the property, but it's, you know, on stilts, you know, those are conversations absolutely to have with insurers.
Councillor. Thanks, Mr Mayor. Thanks, Liam. Several questions, I think, and I'll try to put them in a logical sequence, but I've been scratching around as you've been answering others. You talk about reducing exposure. Would you consider a council like Hawkesbury that has a lot of residents at very high risk of flood increasing its flood planning height be Being one of those means of reducing exposure?
Certainly for new buildings. I mean, ideally, we don't build in flood, like anywhere that has any exposure to flood, right? That eliminates any future completely. Now that's not going to be realistic. That's not going to be realistic. So certainly, you know, where it makes sense, raising the level so you're not building anything, you know, any more.
At those higher levels is certainly something that we support and, you know, was sort of mentioned earlier as well. You know, changes to the types of buildings that are allowed or the types of construction, you know, will also go ways to helping.
Thanks. We've got a difficult intersection with heritage-listed buildings and flooding in the LGA, and they've been, in that period of drought, they were the canaries in the coal mine, really. They were the first of our residents who couldn't get insurance for houses at high risk of flood because of that intersection with the heritage listing, particularly state heritage-listed properties. And yet they are buildings that have been repeatedly flooded over the last 150 years. Many of them withstood the 1867 flood level. Is the Insurance Council looking at insurance of heritage buildings at higher risk of various environmental problems, given that all of them have survived, or they wouldn't be heritage listed to start with?
Look , I'll take that one offline. I think it's an interesting intersection that we need to have a look at. I don't have an answer for you as it currently sits, but I think that's a conversation that we should pick up. Sure
And I've got a personal interest in it. I live in a property that's above the one in 200 that currently isn't heritage. Part of it is about to be heritage listed. I will struggle to get insurance as soon as that heritage listing is put on it, even though I can get insurance without the heritage listing because of the flood level. This is common in this LGA, and it's a real problem for us. We've got residents being quoted $30,000 for insurance. I guess a related question then: what happens for— Are there many providers left who are willing to provide insurance for fire , theft, that sort of thing, even stormwater, that are willing to exclude flood insurance? It's one of the things that we heard from the Insurance Council a few years back, that the number of providers that were willing to split policies like that is becoming smaller and smaller. Is that the case?
Properties that are subject to high levels of flood risk without flood cover. There's regulatory challenges to that around design and distribution obligations. There's reputational issues that come from that. So, as you have pointed out, it's become increasingly difficult to kind of carve that bit off.
Thanks. A couple more, three more, sorry. How can our residents get a better deal? Is it just a matter of ringing up insurers? Is it about using a broker? How, if your property is well adapted to where you are and you're likely to incur few losses, or if your property sits higher on the property, how do you convince an insurer to take you on where normally they wouldn't?
Okay, there's a few bits to that. I think the first thing that a property owner needs to do is understand what their exposures are. So , and I'll use that term slightly differently than I might have been using it before. You know, what I mean by exposures are is what are the hazards, what could go wrong and how much is it likely to cost you? So, you know, if it's a bushfire, flood, burglary, whatever that might be. And getting, you know, a value of, you know, your property and contents. There's links on the Insurance Council website that can take you to some calculators there. There's other ones around. That's sort of the first point. So then you know what you might need to be covered for and how much, ideally, you'd be covered for.
It sounds like a throwaway line and a fob-off, but it is absolutely essential that property owners shop around. As has been pointed out, insurers are, individual insurers are looking to exit particular markets. They're looking to enter, other ones are looking to enter those markets. They have to balance their exposure , so the exposure that they have is to all of the various properties that they've sold insurance to. So they're looking to balance their books as well. So it's essentially It is essential to shop around. Any improvements or facts that you think are relevant to the insurer, you need to raise those. So a key one when we're talking about flood, a bunch of times is, you know, where the property might sit, you know, on the parcel of land.
Very material. Any other improvements that might have been made. So if the house has been raised, certainly things like removing, you know, removing wall coverings and floor coverings, as was mentioned before, that are susceptible to flood, you know, may also have an impact as well. Those are the key recommendations I'd make for anyone.
Do you have any figures on the number of properties underinsured or uninsured in the Hawkesbury LGA? Does the Insurance Council keep an estimate of that?
Is really limited to following events that have occurred, so the claims that have come through and the costs and that sort of thing, which might seem counterintuitive. The issue is that when we start to talk about policies in force and what the price of those might be and where the churning, you know, might be happening, it's all, like, squarely in the commercial.. . in competitive space. So we don't play there at all, unfortunately. Sure
That makes sense. I'm cognisant, and I've been aware of it for a number of years, that point that you made earlier on in the presentation about the community-based risk, really. If you've got a whole lot of properties that are unable to be insured and are all at risk, and I know that's something that we saw before the big floods in Lismore. We saw it with that early flood that wiped out the main street, basically, and the impacts on that whole town where the town really struggled to get back on its feet. We have whole suburbs where many of the properties aren't insured, and I think if we were to have a larger flood, the financial and ongoing impacts on the community would be really severe.
It's absolutely devastating, and it's not a matter of if, it's a matter of when those floods are coming. So, again, this is why it's just so important that
We find some solutions. Yeah, thanks. And the final question, I appreciate your points around the emergency services levy, and one of the points that we've made a number of times is that communities like ours are disproportionately impacted by the ESL because it's a percentage figure, and so therefore it's a sliding scale. So not only are our insurance premiums higher, but our percentage of ESL on those premiums is considerably higher as well. So we get this triple whammy, really, with both flooding and insurance costs. What sort of advocacy is the Insurance Council doing to the state government? Have you spoken to bodies like Local Government New South Wales and the Australian Local Government Association? And how can we, as a disaster-affected LGA, help in this space?
Slightly personal musing, I find it to be quite perverse, actually, that point that you've made around the proportional taxing. You know, those that are sort of impacted the most are impacted the most. And it's certainly, you know, creates a disincentive and affordability issue for insurance. The detailed work in relation to the ESL in New South Wales doesn't sit within my portfolio. However, I understand that we've engaged fairly broadly, certainly with, I mean, a number of governments over a number of years, and also with New South Wales LG. Can I take that question on notice just to kind of check back and see how, you know, if there's to have maybe a further discussion with Hawkesbury Council around that given your disproportionate impact. Yeah
No, not a question. Conscious of time, I know the recommendation in the business paper is to receive the presentation, but I'd like to move another recommendation to write to the New South Wales Premier Chris Minns and the Minister for Emergency Services, Jihad Dib, asking for the DAP for the Hawkesbury to be urgently released. And I'd like to include in that correspondence the New South Wales Reconstruction Authority and a statement for Hawkesbury, Rob and Preston.
Liam, thanks very much for your presentation today. Your business certainly gets talked about in our city, and more so in the last few years. Being the third oldest colony, and probably 80% of our built premises are under PMF. It's massive. So don't think for a minute that your industry gets left out in conversations. Thanks again for that, and the staff will be in contact with you in relation to some of the questions that was asked of you this evening. And thanks again for your presentation.
Through you, Mr Mayor, on the disaster adaptation plan? No, only that it continues to be stuck in the hard basket. Not words I would use. Within government, we're not too sure where it's up to.
Wanted to see if you, as the mayor, were happy with just writing a letter, or you wanted to also include an invitation to the Hawkesbury for the Premier and those key ministers, noting the Premier's hesitation to ever visit. I think if you wanted to host a meeting, that I could add that to the recommendation as well.
There's no need to add it to the motion. We'll certainly have discussions and see what we can do in that regard. Well, we might not get all of them. We might get some, though. Shelter.
Thank you, Mr Mayor. I'd just like to say that I think that was a very beneficial presentation . I did bring the notice of motion to ask to have that done, and I'm very pleased it was. I think it was very clear, the information that was given to us, which is good, and I support the following up. It is very important. We can't ever underplay the importance that it is while we're in this lull between floods. So the more action, the better, and I'm all for it. Thank you.
Thank you. Before we put the motion, I'd just like to note that in the gallery we have one of the residents on the floodplain committee who's come, Mr Mitchell, who's come to listen in relation to the conversation we had with the presentation, and thank you for your presence. The mover of the motion, Deputy Mayor, right reply?
