Large parts of Australia are vulnerable to tropical cyclones, and they have caused serious harm to people and businesses in the past. They also contribute to high insurance premiums in Queensland in particular. In order to tackle this issue, the treasury has created a taskforce aimed at finding solutions to reduce these rates.

According to the Australian government, in order for the event to be labelled a “severe tropical cyclone”, the speed of the winds needs to reach 119 km per hour, and gusts need to top 170 km per hour. Cyclones are also associated with extreme heavy rainfall, which can lead to significant flooding and further property damage or injury. The season for tropical cyclones in Australia is from November to April.

The Bureau of Meteorology estimates that on average, there are 13 cyclones per season in Australia, making up 16 per cent of the total global occurrence. Certain areas of the country are more susceptible, such as North Queensland, with 4.7 tropical cyclones on average affecting the Queensland Tropical Cyclone Warning Centre Area of Responsibility per year.

Cyclones can cause extensive damage, as evident in the devastation to crops due to Cyclone Olwyn earlier this year. The Insurance Council of Australia recently released a statement in answer to a government taskforce assigned to reducing the significant cost of cyclone damage in Queensland.

The response focuses on the high cost of insurance claims in Queensland, and indicates this is due to dated infrastructure.

“Any solution must integrate urgent mitigation and building resilience measures that improve the capacity of cyclone-prone communities and individual property owners to withstand extreme weather,” says Insurance Council of Australia CEO Rob Whelan.

This was evident when Severe Tropical Cyclone Yasi hit the coast of Northern Queensland on February 3 2011. There was significant damage, with the Australian government estimating insurance losses stood at an estimated $655 million.

The statement expresses concern for taxpayers paying the price and suggests that the government must instead invest in mitigating the risk through improving existing infrastructure.

However, until this is completed, ensuring your business is adequately protected with the right insurance is paramount. Contact the team at MGA if you’re concerned about potential cyclone damage.