Aon Benfield's catastrophe model development team, Impact Forecasting, released its 2016 Annual Global Climate and Catastrophe Report in January, which evaluates natural disasters.
The report identified 315 nat cat events in 2016 that together generated economic losses of $US210 billion. For historical context, Aon Benfield said 2016 was the seventh highest year on record with the combined economic loss exceeding $US200 billion for the first time since 2013.
The top three perils – floods, earthquakes and severe weather – accounted for 70% of all economic losses in 2016. Despite 72% of cat losses occurring outside the USA, the US still accounted for 56% of global insured losses.
No backing for PC recommendations
In Australia, the Federal Government announced in late December that it would not support the Productivity Commission’s (PC) recommendation the government increase natural disaster mitigation funding to $200 million a year over time while significantly reducing its contribution to recovery spending.
The PC had released its final report on natural disaster funding arrangements on 1 May 2015.
The government’s response said it supported the PC’s recommendation the insurance industry lead work to develop guidelines for standardising information for households on policy coverage, natural hazard risks and indicative costs of rebuilding after disasters.
The response said the government recognised that parts of Australia, especially northern Australia, had experienced premium increases because of natural disasters over the past decade. “The government established the Northern Australia Insurance Premiums Taskforce to consider the feasibility of options to lower premiums in areas subject to high cyclone risk and to make policy recommendations. The government is considering the taskforce’s report,” Justice Minister Michael Keenan, who is responsible for disaster funding, said.
NSW Law Reform Commission report on s6
The NSW Law Reform Commission’s report on s6 of NSW’s Law Reform (Miscellaneous Provisions) Act 1946 has been released.
It recommends a new provision that clarifies areas of uncertainty and makes reforms where necessary.
S6 enables civil litigation plaintiffs to access insurance funds where proceedings against an insured defendant are not possible or would be pointless because, for example, the defendant is missing or insolvent. It achieves that by a special “charge” that attaches to the money the insurer would be required to pay under the insurance contract.
The NSWLRC said the charge had caused many conceptual problems, for example, in cases where an insurance contract also allowed for money to be paid to fund defendant companies’ directors & officers’ defences.
The new provision does not rely on the charge but gives plaintiffs direct access to the insurer, where appropriate.
NSWLRC says its recommendations do not increase insurers’ liability. “Like the current s6, the new provision should ensure an insurer is not liable for more than the insurer would have been liable to pay under the contract. It should also ensure the insurer can rely on the same defences an insured defendant could have relied on in an action brought by the plaintiff,” the commission said.
I would hope this change, if enacted, will overcome some of the difficulties that arose in Chubb Insurance Company of Australia Ltd v Moore  NSWCA 212, which saw s6 attract judicial criticism.
Diary note: Asia Pacific Insurance Conference
Mark your diaries now – the inaugural Asia Pacific Insurance Conference is in Singapore on 18-20 October.
This is a not-to-be-missed event. Click here to read more.
AILA Young Professionals
A vital focus group for AILA is the Young Professionals. YPs are a valuable source of ideas and inspiration and represent the industry’s future. AILA has developed a national subcommittee of YPs representing each branch. Chairs are Jessica Beard (Qld) and Dan Robinson (NSW).
Formed in 2016, the subcommittee quickly produced YP events in each state in late 2016 and has developed an exciting program for 2017.
It offers soft skills and technical development seminars in each branch, together with networking opportunities, something for which AILA YPs are famous.
The YPs are also working with AIDA, particularly British Insurance Law Association colleagues, to develop global ties, education and networking opportunities. Aussies are well known for getting the travel bug in their early professional development years and a global network of YPs will assist them greatly.
I encourage all YPs to monitor event dates and details on our website. AILA is also developing a YP page on the website that will have specific YP updates and contacts.
Please get in touch with any subcommittee member with your ideas.