Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Corporate Update (November 2016)
33 slides from Insurance Australia's corporate update, Nov 8, 2016
Slide 1: At what cost?
At what cost? Mapping where natural perils impact on economic growth and communities Peter Harmer Terry Rawnsley Managing Director and Principal and Partner Chief Executive Officer SGS Economics & Planning 8 November 2016
Slide 2: Welcome
Welcome Peter Harmer Managing Director and Chief Executive Officer
Slide 3: Play animation
[PLAY ANIMATION] https://www.youtube.com/watch?v=ZSuhB0 0bROk
Slide 4: At what cost? Mapping where natural perils impact on economic growth and communities
At what cost? Mapping where natural perils impact on economic growth and communities Parliament House, Canberra 8th of November
Slide 5: At what cost? Mapping where natural perils impact on economic growth and communities
At what cost? Mapping where natural perils impact on economic growth and communities Parliament House, Canberra 8th of November
Slide 6: Overview
Overview • A number of recent studies have focused on a range of aspects related to natural perils including costs, funding arrangements, land use planning and policy implications. • This study has focused on highlighting Local Government Areas which are at the greatest risk of various natural peril
Slide 7: Data
Data • Population • Gross Domestic Product ($ value of income produced) • Economic Resources (Index score) • Natural Perils (5 Point Scale: Low to Extreme) • Thunderstorm • Earthquake • Bushfire • Cyclone 7
Slide 8: Gross Domestic Product 2014-15
Gross Domestic Product 2014-15 8
Slide 9: Index of Economic Resources
Index of Economic Resources 9
Slide 10: Insurance losses by natural peril 1970–2013
Insurance losses by natural peril 1970–2013 Source: Productivity Commission Natural Disaster Funding Arrangements Report (2014) 10
Slide 11: Insurance losses by natural peril 1970–2013
Insurance losses by natural Peril 1970–2013 Share of total Source: Productivity Commission Natural Disaster Funding Arrangements Report (2014) 11
Slide 12: When viewing the results
When viewing the results • Data is at the Local Government Level. • This ‘average outs’ risk factors across a Local Government Area. • For example, for flooding, properties along a waterway would likely have a higher risk rating than other parts of the LGA which are on higher ground. • The risk rati
Slide 13: Spatial Analysis – Risk Level
Spatial Analysis – Risk Level No Exposure Low Medium High Very High Extreme GDP ($M) 73% 4% 3% 11% 6% 3% Cyclone Population 76% 4% 2% 7% 7% 3% GDP ($M) 23% 52% 13% 8% 2% 0% Bushfire Population 14% 59% 17% 7% 2% 0% GDP ($M) 26% 19% 27% 27% 1% 0% Flood Population 22% 22% 31% 23% 2% 0% GDP ($M) 0% 0% 4
Slide 14: Spatial Analysis – Risk Level
Spatial Analysis – Risk Level No Exposure Low Medium High Very High Extreme GDP ($M) 73% 4% 3% 11% 6% 3% Cyclone Population 76% 4% 2% 7% 7% 3% GDP ($M) 23% 52% 13% 8% 2% 0% Bushfire Population 14% 59% 17% 7% 2% 0% GDP ($M) 26% 19% 27% 27% 1% 0% Flood Population 22% 22% 31% 23% 2% 0% GDP ($M) 0% 0% 4
Slide 15: Spatial Analysis – Regions
Spatial Analysis – Regions GDP Population Region ($Million Cyclone Flood Storm Bushfire Earthquake (000) ) No Sydney $377,974 4,921 High Medium Medium Very High Exposure Regional NSW $128,944 2,697 Low Medium Medium Low Medium Melbourne $284,814 4,529 No Exposure Medium Medium Medium Very High Regio
Slide 16: Spatial Analysis – Regions
Spatial Analysis – Regions GDP Population Region ($Million Cyclone Flood Storm Bushfire Earthquake (000) ) No Sydney $377,974 4,921 High Medium Medium Very High Exposure Regional NSW $128,944 2,697 Low Medium Medium Low Medium Melbourne $284,814 4,529 No Exposure Medium Medium Medium Very High Regio
Slide 17: Tropical Cyclone Risk
Tropical Cyclone Risk 20% of Australia’s GDP is at High to Extreme Risk of disruption from Cyclones. GDP in this area is increasing at 3.4% per year. 17
Slide 18: Western Australian Exports ($M) – Cyclones
Western Australian Exports ($M) Cyclones 18
Slide 19: Storm
DG SGS Economics & Planning sGS THUNDERSTORM Econ Panning Risk Score by LGA Legend No Data 1 o(Wo Exposure) EE 1010) HB 2 (medium) i 3 (He) HE + (very High) A HM 5 (oxteeme} ° 500 11000 km 19
Slide 20: Flood
& Planning sGs FLOOD Economies Pang Risk Score by LGA Legend No Data 1 o(Wo Exposure) HB 2 (medium) HB (Hien) HB 4 (very High) A HB 5 (etc0me) ° 11000 km 20
Slide 21: Queensland Exports ($M) – Major floods
Queensland Exports ($M) Major floods 21
Slide 22: Bushfire
[Stew Bushfire & Planning sGs BUSHFIRE Banna Risk Score by LGA Legend No Data 1 0(Wo Exposure) BE 100m HE 2(sedium) i 3 (He) HE + (very High i HB 5 (oxreme} ° 500 11000 km 22
Slide 23: Bushfire
%SSS Eten & Planning sSGS BUSHFIRE Foros Pag Risk score by LGA Legend ae No Data 0 (No Exposure) cay (Low) HB 2 (medium) Hi 3 (rien) HB very High) HM 5 (extreme) ° 100 200km 23
Slide 24: High GDP LGA
High GDP LGA Share of Tropical LGA State 2014-15 GDP Flood Storm Bushfire Earthquake GDP Cyclone Brisbane QLD 115,421 7.1% High High Medium Low High Sydney NSW 112,681 6.9% No Exposure No Exposure Low No Exposure High Melbourne VIC 84,629 5.2% No Exposure High Low No Exposure High Gold Coast QLD 30,
Slide 25: Economic impact
Economic impact • The high GDP LGAs include a mix of mining areas and knowledge intensive CBDs. • CBD impacts do impact economic activity: ‒ The Melbourne CBD 450,000 workers are at risk of flood. Flooding have impacted on the transport network a number of recent occasions causing economic disruptio
Slide 26: Economic Resources
Economic Resources State Index of Population LGA Economic Cyclone Flood Storm Bushfire Earthquake Resources Moree Plains NSW 1 14,053 Low High Medium Low Low Fairfield NSW 2 204,442 No Exposure High Low Low High Wellington NSW 1 9,073 No Exposure High Medium Low High Hepburn VIC 4 14,794 No Exposure
Slide 27: Shared Responsibility
Shared Responsibility • The Royal Commission into Victoria’s Bushfires used the expression ‘shared responsibility’ to describe how the community can deal with natural peril risks. • It recommends that Government improve protective infrastructure, emergency management and advisory roles. • In turn, c
Slide 28: Implications for individuals
Implications for individuals • Better information will equip individuals with the knowledge to understand the risks and options available to them. • Help individuals make more informed location decisions in terms of their current and future location. • Ensure their insurance coverage is appropriate
Slide 29: Implications for business
Implications for business • Understand the natural peril risks in their location and assess insurance policies and emergency procedures. • Risk of reduction in income. • Consider if their workforce is in high risk locations and the resulting implications for their operations. • Understand the risk t
Slide 30: Implications for governments
Implications for governments • Governments overinvest in post-disaster reconstruction and underinvest in mitigation that would limit the impact of in the first place. • Disaster costs have become a growing, unfunded liability for government. • The economy and taxation revenue are at greater risk of
Slide 31: Interactive map demonstration
Interactive map demonstration http://www.sgsep.com.au/maps/2016/IAG/ 31
Slide 32: Q&A
Q&A Peter Harmer Terry Rawnsley Managing Director and Chief Principal and Partner Executive Officer SGS Economics & Planning
Slide 33: We make your world a safer place
We make your world a safer place 33
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