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An examination of accident compensation claims during
natural hazard events
Rosi Winn, Alice Huston & Catherine Weston
• Hazards in Australia • Analysis scope & approach • Results
Agenda
“Flood claims could climb as high as $6b” SMH 25/1/11
“Victoria on heat alert” The Australian 30/1/2011
“Counting the cost of Yasi's great fury” SMH 5/2/11
“Disasters to take toll on insurance costs” ABC News 6/2/11
Todd river in flood Source: http://www.alicespringsanglicanchurch.org.au/about_alice_springs.php
Todd river regatta Source: http://www.westlakes.rotaryaust.org/images/uploads/regatta.jpg
Cooper creek punt – 2011 Source: http://www.theaustralian.com.au/news/nation/gallery-e6frg6nf-1225877106020?page=11
SouthernFloods 1990
Drought 2002-5
SouthernHeatwave
2009
Record rain WA
1999
Hail Sydney 1999
Hazards in Australia
1950 1960 1970 1980 1990 2000 2010
Floods NSW 1955
Fires WA
1961
Meckering Earthquake WA1968
Fires WA
1978
Fires TAS 1967
Floods Brisbane
1974 Cyclone
Tracy NT 1974
Drought 1982-3
Fires VIC 1983
Dust storm VIC 1983
Newcastle Earthquake NSW1989
Cyclone Larry 2006
Cyclone Yasi 2011
Floods QLD / VIC
2011
Fires ACT 2003
Dust storm NSW 2009
HeatwaveBrisbane
1994
El Niño / La Niña – rainfall patterns
El Niño La Niña
Cyclone activity in the Australian region is also linked to La Niña.
2009 – the end of the drought
Sydney dust storm – Sept 2009 Source: http://www.triplem.com.au/sydney/shows/grill-
team/photos/dust-storm?selectedImage=2
Victorian bushfires – Jan / Feb 2009 Source: http://www.theage.com.au/national/firefighters-battle-new-
outbreak-of-victorian-bushfires-20090224-8g17.html
Major heatwave in Adelaide & Melbourne – Jan 2009
• High level study covering both CTP and workers
compensation • Based on more highly populated states – NSW,
QLD, VIC • Work with Scheme data – standard data variables • General approach was a matched pairs analysis
• Claims experience reflects a multitude of factors • Approach compares experience during an event vs. that
at other “similar” times – this standardises for other factors without explicitly identifying them
Approach - general
• We considered 2 source databases
• ICA – historical and current disaster stats • AG’s Department Disasters Database
– records all natural and non-natural disasters dating from 1622 onwards
• Filter to pick events • Types of events • Locations & durations • Timing – 1/1/1981 onwards
• Separate BOM data used for heat waves
Selection of events
Selection of events
VIC NSW QLD All Bushfire 3 3 1 7
Cyclone 0 0 3 3
Earthquake 0 1 0 1
Flood 4 4 3 11
Hail 0 2 3 5
Heatwave 5 5 5 15
Storm* 5 4 3 11 All 17 19 18 53
• 6 hazards selected for analysis
• Insufficient events for: • Tsunamis • Tornado • Landslide • Earthquake * Note: 1 storm event covers 2 states
• 10 pairs selected for each event • Selection algorithm considered day of week, seasonality,
holidays, other events (“black out” periods)
• Analysis considered claim frequency & mix of characteristics
Selection of matched pairs
Different multi-year approach used for events >2 weeks
NSW CTP Frequency • Examine results by event
and across events • Wary of events which may
not be representative • Look for consistent
patterns of experience • Also consistency across
states
Sample results
0%
20%
40%
60%
80%
100%
120%
140%
7 8 9 11 13 22 12 14 28 29 32 35 36 39 40 41 42 43 31
Storm Hail Flood Bushfire Heatwave Earthquake
Ratio of event claim frequency to matched pairs
Outlier – christmas / NY period
Possibly influenced by
legislative change
Flood
• Events
• Storm – Australia wide • Hail – NSW & Queensland
(incl. 1999 Sydney hail) • Cyclone – limited to Queensland
(incl. Larry, Yasi) • Characteristics
• Frequency • Mix of claims
Storm, hail & cyclone - events
• Clearer picture for storm, similar patterns
but less evidence for hail & cyclone • Generally higher frequency, especially for
CTP - despite exposure effects? • CTP
• more low severity claims, younger people, pedestrians, multi-vehicle collisions?
• fewer cyclists, motorcyclists, • Workers
• more claims from safety workers, • slightly more females
Storm, hail & cyclone - findings
• Events
• 4 NSW, 3 QLD, 4 VIC • Major events
• Newcastle June 2007 • Melbourne January 2011
• NOT Brisbane 2011 • May not be sufficiently
representative of major events
Flood - events
• CTP
• Higher frequency • Similar claim mix effects as for
storm • Workers
• Lower frequency • More females, older workers
• Flood events tend to be local • Are these effects caused by the
flood or rain? • Needs more granular analysis
Flood - findings
Bedourie March and April 2011 Source: http://www.wrightsair.com.au/floodwaternews.htm
Rosi Winn
• Events
• 3 Vic, 3 NSW, 1 Qld. • 3 long duration
• Findings • CTP – More fatalities • Workers - Increased claims from
emergency response workers • Some other effects observed with
weak evidence – interpretation? • Events localised - NSW workers claims clustered by postcode
=> more granular analysis may be of interest
Bushfire – events & findings
Victorian bushfires 2009 Source: http://www.churcheswa.com.au/2009/02/prayer-for-
those-affected-by-the-victorian-bushfire/
Heat events • Identified events using BOM data
• EHF captures temperature anomalies, important since people acclimatise to local conditions
• Top 5 events in each city – broad coverage, although UHI effects too
• In general, people most at risk • Older people • Those with cardiovascular and
respiratory conditions • Those undertaking physical activity
• CTP – little noticeable change
• More high severity claims? • More claims from young people?
• Workers • Slightly reduced claim frequency • Increased proportion of claims for males & older workers • Increased proportion in some industries – food,
manufacturing • Suggests some link to those more at risk, but
evidence base is fairly weak
Heat events - findings
• Australia = “tectonically stable”
• 1989 Newcastle • 1968 Meckering, WA • 1954 Adelaide
• Not possible to a anticipate, except perhaps aftershocks => responses limited
• Newcastle earthquake – 28 Dec, 10.27am • Results included in paper for interest only
Earthquake
• Implications for Schemes
• Relatively benign financial impact • Indications that most people are able to modify behaviour
to reduce exposure • Implications for community safety
• Risks to pedestrians during adverse weather • Risks to event responders • Heat events – care if not able to modify activities / work
environment • For more localised events (flood, bushfire) - more work may
be needed to analyse experience at a more granular level
Overall conclusions
Questions?