STATE OF PLAY NSW NORTHERN RIVERS 2024: The risk of property uninsurability continues to concern the region

 

When record flood events hit south-east Queensland and Northern New South Wales in the first quarter of 2022 the Australian insurance industry was already dealing with est. 85,953 open insurance claims, driven by six declared insurance events that occurred in 2021 [Insurance Council of Australia, November 2023].

In September 2022 the Insurance Council of Australia observed:

The south-east Queensland and northern New South Wales flood has so far cost the insurance industry $5.28 billion – almost triple the cost of the 2011 Brisbane floods and now the second most costly extreme weather event in Australia’s history.

At that point in time the Insurance Council was asserting that:

At present no region in Australia is uninsurable, however worsening extreme weather events are driving up premiums in parts of the country most exposed to extreme weather risk and rendering insurance unaffordable for some.

A neat piece of hair splitting made despite the fact that three months before, the Climate Council had issued a media release highlighting an analysis indicating that:

One in 25 Australian properties will be effectively uninsurable by 2030, due to rising risks of extreme weather and climate change.

An analysis which, in breaking the Northern Rivers region into the two federal electorates which encompass its land mass, predicted that in the Richmond electorate 20% or 22,274 properties were at "high risk" while up to 11% or 11,691 properties were at "high risk" in the Page electorate.

In Yamba alone, in the Clarence Valley section of the Page electorate, in a worst case scenario 5,237 properties are likely to become progressively uninsurable across a 70 year span commencing in 2030. A number that would contain all residential dwellings and other buildings in present day Yamba. 

While the Lismore City section of the Richmond electorate, in a worst case scenario is likely to see 5,711 properties become uninsurable over the same time period.

In the two years since the Insurance Council's statement the word "uninsurable" has continued to crop up in discussions concerning flood prone land and existing homes that had been built on such land - and as a region we have continued to twist this way and that trying to comes to terms with a grim reality.

The National Insurance Brokers Association in its October 2023 short submission to the federal parliamentary Inquiry into insurers’ responses to 2022 major floods claims was frank it its assessment of the insurance situation for so many households:

Increasing insurance losses due to more frequent natural disasters, as well as changes to actuarial and underwriting models and underlying risk profiles, have resulted in significant increases in insurance premiums in many parts of the country.....

The paradox of insurance is that those who are most impacted by natural perils, i.e. low socioeconomic households, are least likely to be able to afford to protect themselves from the effects of such events. Uninsurability has the potential to exacerbate existing inequalities by trapping vulnerable populations in high-risk areas and exposing them to greater social harm. Low socioeconomic households are less likely to be able to recover from natural disasters due to lower household incomes and less secure work. Low socioeconomic households are also more likely to be engaged in part-time or casual work. This demonstrates that the impacts of uninsurability will disproportionately affect those who are least able to protect themselves against these impacts.

The issue continues to be problematic for the NSW Northern Rivers region.......

Echo, 23 August 2024:

Insurance isn’t something that you necessarily have front of your mind most of the time but when you lose your house in a flood it suddenly takes on a whole new importance.

Insurance means that you have the opportunity to rebuild, to try to put your life back together – but flood insurance is not available to everyone, particularly those in flood risk areas and leaves them extremely vulnerable following natural disasters such as the 2022 flood.

Flood rubbish around You Are Here sign in Lismore, 7 March 2022. Photo David Lowe.

For a town like Lismore, and many others around the world, this lack of insurance means that they are unable to effectively rebuild following floods. The Inquiry into insurers’ responses to 2022 major floods claims has highlighted that ‘areas with low insurance cover have significantly worse post-disaster outcomes that negatively impact households, local businesses, and local economies’.

This Inquiry was commissioned by the then NRRC for the Community Leaders Forum that was led by Lismore MP Janelle Saffin, NSW Parliamentary Secretary for Disaster Recovery and made up of State MPs Tamara Smith (Ballina), Geoff Provest (Tweed), and Richie Williamson (Clarence); Federal Member for Page Kevin Hogan; and mayors Cr Steve Krieg (Lismore City), Cr Chris Cherry (Tweed Shire), Cr Kylie Webster (Kyogle), Cr Michael Lyon (Byron Shire), Cr Sharon Cadwallader (Ballina Shire), Cr Robert Mustow (Richmond Valley) and Cr Peter Johnstone (Clarence Valley).

‘I thank its authors, academics from the University of Queensland’s Business School – Professor Paula Jarzabkowski, Dr Katie Meissner and Dr Matthew Mason – who are very learned in this area,’ Ms Saffin said.

‘They have made a case study of Lismore that can be extrapolated across the Northern Rivers region, New South Wales, and indeed, other places in Australia....

...Whatever is done, government needs to be very involved in the response, and we must require mitigation and adaptation to be in the mix,’ she said.

Ms Saffin has made a submission, on behalf of the Community Leaders Forum to the Federal inquiry into insurers’ responses to the 2022 major floods claims utilising this report as the basis for that submission.

‘This analysis shows that the current problem of insurability will remain a wicked problem for Lismore, with no foreseeable reduction in the pricing of private sector flood insurance,’ states the report.

‘Without access to affordable insurance:

• Lismore property owners will struggle to attain or maintain mortgages;

• Lismore landlords will struggle to provide a robust residential or commercial rental market;

• Lismore businesses are likely to have their credit and growth compromised;

• The commercial attractiveness of Lismore is likely to suffer.’

Mitigation, relocation and adaptation key

Ms Saffin noted that the submission found that there is no single, per-existing solution for the complex problem of uninsurability in Lismore.

It makes four recommendations about the potential of a new insurance ecosystem for Lismore:

1. A national risk pool is a tested solution that, when well-designed, could support affordable insurance in Lismore for residents and small businesses providing it is accompanied by a medium and long-term program of risk reduction including relocation.

2. Small parametric products, which can be spent flexibly by policyholders, have potential to provide economic benefit to Lismore business owners supporting them with rapid response to business interruptions, particularly from small-scale events.

3. Parts of Lismore fall within the uninsurable zone and could be considered for insurance innovations to support planned migration and provide insurance cover during any transitionary period.

4. Lismore residents and business owners will benefit from a sustained program of embedding risk management capabilities throughout the community to support them in reducing their risk and increasing their financial ability to respond to hazards.

Addressing flood trauma in Northern Rivers children thirteen months after a catastrophic unnatural disaster

 

The Sydney Morning Herald, “Northern Rivers in youth mental health crisis”, 20 March 2023, excerpt:

A soon-to-be-published resilience survey has found levels of depression and anxiety symptoms are now higher among Northern Rivers children and young people than the national average of earlier survey participants for some student groups.

Conducted almost six months after the February 2022 disaster, the survey was taken by 6611 school students, nearly 13 per cent of all young people aged between five and 19 in the region.

It found that almost one in three Northern Rivers primary students and more than one in three secondary students were at risk of depression and anxiety.

More than 40 per cent of primary students were at risk of trauma-related stress. For secondary students, it was almost 20 per cent.

Inundated, isolated, in despair: Floodwaters around Lismore’s St Carthage’s Cathedral and Trinity Catholic College.CREDIT:GETTY

Healthy North Coast, a not-for profit organisation delivering the Australian government's Primary Health Network program in the region, commissioned the research as the first step in its Resilient Kids initiative, funded by a $10 million grant from the National Emergency Management Agency.

Healthy North Coast chief executive Monika Wheeler said that the survey established a baseline which could help to measure the mental health and wellbeing of young people in the Northern Rivers over time.

She said young people reported generally feeling supported and connected within their schools and communities. However, the survey also highlighted areas to focus on in future.

"The Resilient Kids initiative will use local insights to design tailored mental health and wellbeing supports," she said.

"We know that successful recovery is based on understanding community context and is not a one-off event.

"It's multi-year, multi-layered, and our approach to supporting our young people might change over time as we see how they respond."

Tens of millions of federal and state dollars has been promised for mental health and wellbeing programs in the region's schools and wider community.

Safe haven hubs have opened across the region to provide free mental health support. Drop-ins are encouraged and there is no need for referrals or appointments. For young people, dedicated online and phone services also are available.

The difficulty is reaching those who won't, or can't, use these services.

Children's charities Unicef Australia and Royal Far West are rolling out a $4.5 million support program covering 30 state primary schools and preschools in the Northern Rivers and south-east Queensland.

Social workers, psychologists, speech pathologists and occupational therapists will enter school communities to help staff address learning delays in children.

Unicef Australia chief advocate for children Nicole Breeze said thousands of children will need intensive support, as the effects of the disaster can potentially remain hidden for years.

"Our first engagement in this space was after the Black Summer bushfires," she said. "With children the impact can stay hidden, it can take a year or two, sometimes three. The good news is that with the right support, at the right time, they can bounce back."

The plight of Northern Rivers children garnered international attention Last April when Prince William spoke online with Jeanette Wilkins, the principal of St Joseph's Primary School Woodburn, who told him the community had lost its school and "everything in it" and the mental health of the community had taken a major blow.

The school was underwater for eight days.

"We're two months down the track and nothing has changed, those 34 families are still displaced, so there's no certainty for those children," she told the prince.

"For us, the most important thing was to make contact with our families and our children, and as fast as possible to set up a school somewhere just to get the children back to some form of normality and start dealing with their trauma."

At Christmas, 29 families of students and staff at St Joseph's (more than half the students) were still living in some form of temporary housing such as a caravan, shed, shipping container or the shell of their flood-stripped home.

Ten Catholic schools in the Lismore diocese were directly affected by the floods, including St Joseph's. Three schools are inaccessible, and 1250 students are being taught in temporary facilities.

Morning tea and lunch are provided in some schools, as are new school uniforms and shoes, to help address absenteeism. A team of 30 counsellors is working in 23 schools, and community services provider Social Futures is operating in seven of the flood-hit schools to assist families in gaining to access additional mental health social and financial support.

Thirty-seven state facilities suffered significant damage, and five schools still operate away from their original site.

NORTHERN RIVERS NSW STATE OF PLAY JANUARY 2023: in 39 days time it will be exactly one year since a catastrophic extreme flood devastated Lismore

 

As this sad milestone approaches for Lismore residents it must often feel as though the pain will never stop.

ABC News, 18 January 2023:

The Energy & Water Ombudsman NSW says it has received dozens of complaints about power bills issued for unoccupied flood-affected homes & businesses on the state's Far North Coast.

Lismore business owner Anne Walker said she had not used her business premises since it was flooded in February 2022, but months later she received messages from her retailer that said she owed more than $700.

"The texts were coming in saying if I didn't pay this amount, they were going to discontinue my electricity, which is ironic because there was no electricity," she said.

Ms Walker spoke to her provider in October to address the issue, but it took until last week to be resolved.

"It was very stressful — extremely stressful," she said.

The ombudsman's office recorded 55 complaints from the Northern Rivers since the start of September, including 28 from the Lismore area.

"Often there's no resident there, the property is not occupied and, of course, the billing doesn't reflect the fact that," said ombudsman Janine Young.

"[There is] either no usage or, where there is some usage, it's overestimated."

Estimated bills to be reviewed

Residents who spoke to the ABC said the incorrect bills they received were based on estimates of their usage.

This occurs when a meter reader is unable to access a property to record the energy usage, so an estimated bill is issued by the energy provider.

In the case of a situation that has led to vastly reduced energy usage, or no usage at all, Ms Young said the rules for bill estimates needed to be reviewed.

"When estimates are done, the rules allow an estimated bill based on the same period the prior year, or on what a comparable customer might be," she said.

"When there's been floods & there's been no usage, if you're getting an estimate based on the prior year, that's completely wrong.

"Those rules have to be looked at."

Customers should first try to resolve any dispute with their retailer, but those left dissatisfied could turn to Ms Young's office for help, she said.

"We've had outcomes where we've got the bill waived, where we've had the daily supply charges waived as well," Ms Young said.

"The retailer is much more aware of the customer circumstances & when it's likely that the property can be again inhabited — if it can be."

No meters, no power

Adrian Walsh from Broadwater said he received an estimated usage bill of about $800, despite not having power after the flood.

"When I first rang up & complained [to the retailer] ... their solution was to pay the bill & perhaps I could claim it back later," he said.

"I wasn't really in the mood for that."

Bungawalbin's Keely Patch said metering equipment damaged by the floods was still not working in her area.

Despite having only a single working power point in her home, Ms Patch said she was sent estimated usage bills that totalled $800.

"If estimated bills are based off previous usages, that kind of gets taken out of the picture when, for months, there was no usage at all," Ms Patch said.

"Since the bills have come in, I've only been running a fridge & some lights & that's pretty much all I've got."

The ABC heard from people who were experiencing similar issues across a range of energy retailers.

In a statement, Origin Energy said it was committed to supporting customers affected by floods…...

Red Energy said it stopped billing & debt collection activities in the aftermath of the floods while it assessed the situation…….

Exclusive: Only one-fifth of the $1.6bn promised to flood-ravaged communities in the Northern Rivers region of NSW has been paid out by the Perrottet government, new data reveals. @australian https://t.co/SAmCfpvdxe

— Max Maddison (@maxmaddison) January 18, 2023

....Eleven months ago, an unprecedented deluge swept across the eastern seaboard, inundating towns across southeast Queensland and northern NSW, in one of the worst recorded flooding disasters in the nation’s history.

With communities such as Woodburn, Kyogle and Nimbin in the northeastern corner of NSW facing a monumental rebuild, NSW Premier Dominic Perrottet vowed not a dollar would be spared in the recovery effort, saying those who had lost homes were a primary concern.

But of the $1.6bn promised by the government in May last year, Service NSW data reveals only $322.2m has been distributed eight months later.

Inordinately high numbers of grants had been ruled ineligible by the government, with more than 67 per cent of small business grants rejected.

South Lismore cafe owner Tony Zammit said his experience in the aftermath of the floods had been positive, but he had faced issues applying for the small grants program later on, with multiple applications green-lit by Service NSW staff before being subsequently rejected.

“Early on they were helpful but as time went on it became daunting. By the end, honest claims and applicants were treated as criminals,” Mr Zammit, the owner of The Sassy Bean cafe, said.

One near-$50,000 claim was deemed ineligible by Service NSW because assessors could not verify an $1100 electrician’s bill, he said. When he attempted to resubmit his claim, Mr Zammit was told he could not submit any of the same receipts as they had all been deemed fraudulent.

More than 80 per cent of rental support applications have been declined, while of special disaster grants available to farmers and primary producers, only $116m of $302m claimed has been paid out, despite 86 per cent of applications being approved or rejected.

Emergency Services Minister Steph Cooke warned in May last year the government had an “obligation” to ensure the proper processes were in place to filter out fraudulent grant applications. The NSW government’s independent 2022 flood inquiry noted concerns among flood-impacted farming communities that there were “onerous processes for accessing grants, and for submitting development applications”.

An upper house inquiry reached similar conclusions, finding a lack of streamlined grants processes meant applicants were repeatedly interviewed, “leading to frustration and trauma”, while a lack of assessors on the ground “delayed the rollout of grants”…..

It appears that the rot set in at the Bureau of Meteorology within a few months of Scott Morrison becoming prime minister and sadly when BOM was needed most it is alleged in had become highly dysfunctional

“There absolutely needs to be a royal commission into what happened at Lismore. I saw grad mets barely off course in charge of things they would never have been in charge of up until that point. Lismore happened right in the short-staffing period. We go into that event, everyone is already fatigued and working long hours.” [The Saturday Paper, 22 October 2022]

The Saturday Paper, 22 October 2022:

The workplace culture at the Bureau of Meteorology is so toxic that a man was hospitalised twice for psychiatric care, another had a heart attack while working extreme overtime, and was asked to come back earlier than a doctor advised, and at least five more staff took stress leave because of panic attacks and anxiety regarding management oversight.

More than 20 staff have left the media and communications division at the BoM in the past 18 months. The entire marketing team at the agency was “bloodlet” and removed during a restructure and rebranding effort that consumed the time and resources of the weather office during a period of intensifying calamity relating to climate change and natural disasters. Senior meteorologists have also left.

Since June last year, the bureau has spent more than $260,000 with Elm Communications Canberra Pty Ltd, just trying to plug gaps in its public affairs workforce.

Although many of the concerns relate to the media division, meteorologists and other staff have complained of “the severe dysfunction” in this area infecting other parts of the service. Gag orders have been issued to prevent forecasters from speaking to journalists unless their comments are pre-approved. Media managers have explicitly banned the mention of climate change in connection with severe weather events.

In one case during major New South Wales flooding in March last year, an edict was issued that BoM forecasters and other specialists were not to speak to any media after a meteorologist was accused of “fluffing” his lines on climate change.

A spokesperson for the BoM denies this.

In addition to the above concerns, The Saturday Paper can reveal the Commonwealth agency admitted some months ago to staff that it has not been paying overtime correctly and has so far failed to reimburse employees. Indeed, it stopped communicating with them in August about the issue.

The bureau says, in a response to The Saturday Paper, that a “discrepancy” was identified and “an audit of overtime payments is currently under way and all payments made dating from 1 June 2021 are being reviewed”.

The Saturday Paper has spoken with 20 current and former staff members at the bureau to establish a distressing and farcial account of a government agency’s response to a changing climate.

Details in this account that do not appear within quotation marks have nevertheless been provided by individuals who spoke on the condition of anonymity, fearing reprisals…..

“There is so much focus on rebranding efforts like this and all of this window dressing and, in the meantime, the staff are really struggling to get the work done. We have lost so many people due to the [public service] transition to national production.”

Under these reforms, which began after the appointment of Andrew Johnson as director of the BoM, regional forecasting centres in every state and territory have been shuttered. State managers have been sacked and a national desk has been created instead. Johnson has pushed the project with fervour. The new branding, complete with public insistence that the Bureau of Meteorology be referred to respectfully as the Bureau, was, according to sources at the BoM, “completely driven by him”……

The Saturday Paper can reveal that the planned name change and new “corporate presence” began more than three years ago and cost far more than has been reported. In December 2018, the BoM paid almost $90,000 to brand specialists The Contenders for work on the new “positioning project” between then and April 2019. When a new general manager of communications – Emma Liepa – took over in April 2020, she “canned the project” and restarted it using her preferred contractor, The C Word Communications Agency Pty Ltd, owned and operated by Jack Walden. The BoM has characterised this contract as a “preliminary analysis” of perceptions about the agency and its “position in the marketplace” and not part of the “Brand project”.

Walden’s The C Word agency won a $70,000 contract in September last year in a “limited tender” to progress this project. Walden is now a senior manager of communications delivery at the BoM, having started in late November last year.

The Saturday Paper understands that Walden was hired as an EL2 “upper”, the same pay band as his boss Liepa, and is an ongoing public service employee. Walden also worked with Liepa in her previous role at the Victorian Healthcare Association. The Saturday Paper is not suggesting there is anything inappropriate in his employment.

“In this case, a conflict of interest was advised,” a BoM spokesperson said.

“There was no overlap between the work as a consultant and work when he [Walden] commenced as an employee with the Bureau.”

Internally, the rebranding has been prosecuted with fervour by Liepa and her colleagues but resisted and mocked by more junior staff. This is at odds with a BoM statement that says the sentiment, and feedback, from employees has been “overwhelmingly positive”.

“Recently Andrew Johnson launched the new 2022-2027 strategy and rounded off the presentation by telling us all that we had to print off the strategy, read it and he would be testing us if he bumped into us in the office,” a staff member says. “He was dead serious.”

A forecaster who cannot be identified because they still work with the BoM said the “reaction around me on shift over the last few weeks to the new branding announcements has been somewhere between exasperated laughter and anger”.

They continue, “That this is prioritised by management, over severe long-term understaffing of mets [meteorologists] – seemingly not of management and consultants – combined with a huge top-to-bottom restructure of the public service hitting the really hairy stages.

“All of this at the tail end of three La Niñas in a row with the potential for most of the east coast to flood so easily. Meteorologists are tired and overworked. The public reaction today was honestly wonderful and heartwarming. I’m so happy the public saw the bullshit instantly.”

Neither Environment Minister Tanya Plibersek, whose portfolio includes the BoM, nor her office, was aware the agency was about to launch its controversial edict and new look publicly in the middle of a flooding crisis across Victoria. When she demanded an urgent briefing, the response from senior bureau managers was “cagey” and “unsatisfactory”, according to people familiar with the exchange. Internally, BoM staff were told that they were to move full steam ahead and that the minister’s office was happy.

But what the minister’s office did not know, because the BoM did not tell them, was that the full cost of this rebranding was closer to $750,000, with some of that cost completely unnecessary after the banishing of The Contenders and early work done by that firm.

When Plibersek’s people demanded a full list of contracts, this was not mentioned. The Saturday Paper has confirmed this separately using information provided by concerned employees. Bizarrely, the BoM hired EY Sweeney on a $93,000 contract in March to conduct market research regarding the rebrand. What the consultants found was that just 15 per cent of people recognised the Bureau of Meteorology as “the Bureau” – the preferred name for brand recognition in the now-failed repositioning. More than 60 per cent, however, associated “BoM” with the agency.

What matters, according to every staff member who spoke for this piece, is that this side quest isn’t just a bad look. While these dramatic restructures and fiddly public relations exercises unfolded, some of the worst flooding in Australian history happened in northern NSW.

Residents in Lismore in particular were trapped after catastrophic flooding appeared to catch officials off guard. While the SES, itself struggling with a new centralisation plan, is responsible for issuing evacuation orders, they rely on information from the national meteorologists and hydrologists at the bureau.

“The BoM went into this PST [Public Sector Transformation] understaffed, and only lost countless more staff during PST, not realising that not everyone wants to uproot their lives and move to Melbourne or Brisbane,” a meteorologist said.

“There absolutely needs to be a royal commission into what happened at Lismore. I saw grad mets barely off course in charge of things they would never have been in charge of up until that point. Lismore happened right in the short-staffing period. We go into that event, everyone is already fatigued and working long hours.”

At this time – when a meteorologist was due to speak at a press conference about the unfolding flooding emergency in NSW, next to Premier Dominic Perrottet – there was a particular sensitivity within the agency about the warnings provided to the public. This forecaster was told they could speak only from pre-approved lines.

A separate source, who is no longer with the BoM, told The Saturday Paper that the organisation was “down 24 or 25” meteorologists and there were “no meteorologists in management”. The source said good people were slowly forced out, especially meteorologists: “There is such a strangled culture there now.”

After being appointed by the former Coalition government to head the BoM, Johnson set about an aggressive reform program, parts of which former employees concede were much needed. But it happened so fast it caused serious issues across the business.

“The rate of change, ineffective change, that has happened has been a huge problem because there are so many conflicting priorities, that the bureau basically just ground to a halt,” a source says.

“All the money just got funnelled into [PST] and squandered through massive use of contractors and people who didn’t have core knowledge of the bureau, so it took lots of time to ramp up to speed and the like.

“Really important projects like ours just got buried and not funded because all the money just got funnelled off into these other areas.”

One of the projects that was delayed and underfunded was the upgrade of the bureau’s warning systems – a multi-part program with many moving parts – which was left in disarray.

As science was censored or relegated to the sideline and messages became more tightly controlled, the culture at the BoM deteriorated even further. In July and August this year, tens of thousands of dollars were paid to the conflict resolution firm Momentum, which promised to mediate workplace disputes and teach staff how to get along…….

The full article can read here.