The La Niña effect: How to prepare for the storm

Small Business Insurance (Reading time: 3 minutes)

Australia is well known for its extreme weather conditions. Bushfires. Floods. Cyclones. Storms. In severe cases, this can stem from a La Niña or El Niño event, which are both part of the global climate system. A La Niña event dramatically influences our climate. It may bring more Spring rain, cooler days, tropical cyclones, more snow and an earlier onset of the wet season in the north.

A recent Bureau of Meteorology (BOM) report has declared Australia on La Niña watch. That means it’s not a certainty, but we face double the chance of one forming in 2020.

David Gow, QBE’s Head of Major Loss Property Claims says the BOM report is extremely helpful for those engaged in the insurance, risk and mitigation industry.

“The BOM’s La Niña watch announcement is a great opportunity for brokers and customers to plan ahead and make sure we’re all prepared and ready if an extreme weather event does eventuate.”

What’s a La Niña weather event?

La Niña is an event that typically brings above-average rainfall for Australia, particularly across eastern, central and northern regions.

It’s caused by a number of factors, including changes in the surface temperature of the tropical Pacific Ocean. As the BOM observes “the cooler ocean joining forces with the atmosphere is the cause of the changes in global weather patterns*.”

This may result in torrential rain, floods, cyclones and storms, all of which can have a big impact for communities and businesses.

Reflections on the last La Niña event

Australia’s most recent La Niña event was from April 2010 to March 2012.

According to BOM analysis, 2010 and 2011 were the third-wettest and second-wettest calendar years on record for Australia, with 703 mm and 708 mm respectively recorded, both well above the long-term average of 465 mm**.

This period, which began in November 2010 and continued until January 2011, included the Brisbane floods, as well as other substantial floods in parts of New South Wales, Victoria, Western Australia and Tasmania.

“The Brisbane floods were heartbreaking, says Gow. “l remember those images of the boats being pushed down the Brisbane River and the houses being completely submerged. It was the busiest time I’ve ever experienced in insurance.”

Severe tropical cyclones also hit Queensland during the last event, including Cyclone Yasi in January 2011 which was deemed the most powerful cyclone since 1918, which was also a La Niña year.

The impact and frequency of these weather events aren’t predictable,” says Gow.

“You can’t rely on what’s happened in the past. A single major weather event every 100 years is no longer a given. Thanks to climate change, weather is becoming more extreme and unpredictable. The latest bushfires are an example.”

It’s no longer safe to make decisions on the basis that an extraordinary event is unlikely to happen, Gow said.

“During the time of the Brisbane floods I remember speaking to a family who bought a house on the river. Their decision not to buy flood insurance was based on the fact that they were highly unlikely to experience flooding as severe as that of 1974. Unfortunately, the Brisbane floods were worse and sadly that family lost everything.”

Working together to prepare

With a 50% chance of a La Niña event on the horizon, it’s important for insurers and brokers to work closely with customers to evaluate cover now.

“Check insurance policies with brokers and insurers to ensure there is adequate cover, especially for flood as it may be excluded under standard wordings,” says Gow.

“It’s also key that brokers remind their customers to assess and update their sum insured. Make sure to review not just the rebuild sum insured, but also the limits for the removal of debris, including any asbestos removal and temporary accommodation coverage, should the worst happen.”

Craig Rogers, QBE’s Risk Engineering Manager, also recommends businesses review their exposure to storm and flood now in relation to potential damage to property, contents and stock.

“It's about being prepared and understanding your exposure, whether that relates to a private residence, or a commercial or industrial occupancy,” says Rogers.

“Find out the exposure to tropical cyclones, storms and flooding, and review if mitigation is sufficient to reduce the likelihood of property damage and interruption to business operations. Business continuity planning should also include review of exposure to weather perils. Local councils now provide flood maps online for most built-up areas, and state governments provide guidance on weather event preparedness. This information in addition to that available from insurers, should be leveraged to reduce the likelihood of damage to property.”

What customers can do

  • Review cover to make sure you have the right – and adequate – insurance in place.
  • Assess your flood exposure.
  • Take a close look at your policy exclusions, especially flood.
  • Consider business interruption – are you covered?
  • Will disruption to your suppliers affect your business?

Mitigation matters

Measures to prevent or minimise potential damage should also be front of mind for brokers and their customers.

Personal and business property may be exposed to weather events at any time, therefore awareness and preparedness are necessary, says Rogers.

“Heavy rainfall may result in localised flooding, while windstorms may result in building damage. Inadequate planning and maintenance may increase the likelihood of property damage.”

Property owners can take steps to protect themselves, he says.

“This may include ensuring that high value goods are stored at a higher level or lifting critical equipment and services, such as electrical equipment, above known flood levels. Below grade areas, such as basements, require monitoring and additional protection may include installing pumps, or building flood barriers. Mitigation requirements will be dependent on the property exposure.”

Many practices relating to bushfire exposure also relate to storm and flood exposure. For example, ensuring trees are cut back away from buildings, and making sure roofing and gutters are clear of obstructions and debris should also be considered as part of property inspections now, says Rogers. “During drought periods, building roof inspections may have been relaxed, but it’s important to ensure maintenance is undertaken no matter what the weather, as each season presents different issues that may result in drains clogging, for example.”

Commercial property owners should get regular building surveys to help prepare for a weather events, and these may help with understanding risk and making plans, so that effective mitigation measures can be put in place.

In fact, Gow says, planning can be a huge factor for customers.

“During the 2017 Lismore floods, two policy holders in the same street had different claim results, because of their level of planning,” he says. “We saw a clothing shop reopen in just 48 hours because all their stock was placed high above the flood lines. Their floors were tiled so damage was minimal. But in the same street a newsagent had to close down completely as all their stock, equipment and interiors were not moved and they were destroyed.”

Don’t forget to develop an evacuation plan to ensure you, your family and colleagues are safe.

“That’s got to be your first priority. Of course you also want to do all you can to save your property and get your valuables above the water line,” says Gow.

How customers can prepare

  • Get a building inspection and follow the recommendations.
  • Maintain roofs and guttering, and ensure your buildings are watertight. Reducing the likelihood of damage prior to inspection is important.
  • Place stock and electrical equipment above the recommended level to avoid water damage. Install a sump pump in the basement.
  • Check your drainage. Your council and waterways should be keeping channels clear.
  • Consult with your local council.
  • Physically prepare your home and business for severe weather.
  • Develop an evacuation plan for you, your employees and your family.

La Niña and rural Australia

Because of ongoing drought conditions in large parts of Australia, many of our farmers have been doing it tough for a very long time. And while most farmers would love to see rain, a weather event like La Niña could be disastrous.

Laura Nelson heads up QBE’s Small and Medium Enterprise (SME) Digital Engagement and has a particular focus on farm insurance.

“Rain to farmers is both a blessing and a curse,” Nelson says. “Just the right amount over a prolonged period can be wonderful. But, if you get too much of it in one go, everything could get washed away. Heavy rain can destroy newly planted crops and wash away nutrient-rich topsoil. Mature crops can also be affected.

"If it arrives just as soft fruits, like tomatoes and plums are ripening it can bruise or split skins, all of which is disastrous for a farming business.”

Large farms usually can’t be insured for flood events because of the inability to properly flood map them, pinpoint the location of assets and understand the risks that attach, says Nelson.

"While farmers are always very busy, it’s crucial to take the time to prepare for extreme weather events,” says Nelson. “It’s checking roofs and clearing out gutters. Cutting overhanging trees away from structures, maintaining fences, ensuring good quality hail netting is in place and machinery and livestock have protection if needed.”

Supporting our customers after the event

Regardless of mitigation efforts, major catastrophe events may still unfortunately happen. And when they do, QBE swings into action to respond and get customers the help they need, says Gow.

Technology is improving all the time, which can speed up the claims process. Photos and videos can be used to substantiate claims and policy information is now available digitally, which also simplifies claiming.

“Our customer mapping tool leverages existing technology overlaid with a range of data input layers to provide an effective way to map customer data, segment impacted areas, and guide QBE’s response strategy and efforts,” says Gow.

“Once it’s safe to get work underway our team of assessors, restorers and builders can get on the ground and we can start the process of rebuilding and helping our customers get their life back to normal, which is what insurance is all about.”

Information and resources

Emergency services and State and Territory governments have a range of useful resources to help business and individuals plan and take practical actions to protect their assets and understand risks.

Victoria State Emergency Service

New South Wales State Emergency Service

South Australia State Emergency Service

Tasmania State Emergency Service

Western Australia Department of Fire & Emergency Services

Queensland Government’s get ready Queensland resource

Northern Territory Government’s preparation hub

This article first appeared on and is reprinted with the permission of QBE Insurance.

The advice on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice. You should ensure you obtain and consider the policy wording or Product Disclosure Statement for the policy before you make any decision to buy it.

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Mitti Insurance Pty Ltd (Mitti) (ABN 56 640 574 385, AFSL 528433)

Mitti Insurance Pty Ltd is a related entity of QBE Insurance (Australia) Limited.