Insurers and advisers must face up to disaster trend

The increasing frequency of natural disasters bring with it immediate and long-term health effects that insurers and advisers must address, writes Michael Browne.

I love a sunburnt country,
A land of sweeping plains
Of ragged mountain ranges
Of droughts and flooding rains.
I love her far horizons
I love her jewel-sea
Her beauty and her terror –
The wide brown land for me!

This is the second stanza of Dorothea Mackellar’s iconic poem My Country (originally titled Core of My Heart), written when she was 19 and living in Britain, terribly homesick for her family’s property in Gunnedah.

Although penned in 1908, its poignant descriptions of Australia’s landscape and its extreme weather conditions have made it iconic and perhaps our best known piece of poetry.

Fast forward a century, and our dramatic weather continues to shape the fabric of our society.

And as we are repeatedly faced with an increasing number of natural disasters, the ongoing and long-term health conditions which flow from these events, including the types of related insurance claims for both general and life insurance, will continue to have an impact on our industry.

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From the recent floods and bushfires across the country, to the families still recovering from the devastating and tragic effects of the January 2011 floods in Queensland, New South Wales and other regions, the flow-on impact on our industry is becoming increasingly more apparent with time. 

While much of the media attention is on the tangible items which are claimed through general insurance such as cars, homes and other precious assets, do we stop and think about the life insurance consequences of the effects of natural disasters?

As the tragic human cost of these disasters become increasingly apparent, the immediate and longer-term health effects are also being felt (to varying degrees) in affected regions. 

Several short-term adverse health effects have well-established associations with such natural disasters, including the inherent risks such as near-drowning, hypothermia and infection in the case of floods, or burns, smoke inhalation and other respiratory complications in the case of bush fires. 

In the medium- to -long term, some of the conditions may have more far-reaching effects than those directly impacted by the disaster.

They include infectious diseases such as diarrhoeal illnesses and vector-borne diseases spread by a non-human carrier, such as malaria or dengue fever transmitted by mosquitoes.

The prevalence of such diseases usually increases after a flooding disaster, due to factors including over-crowding of emergency shelters, poor sanitation, a lack of basic personal hygiene (due to a lack of clean water for washing) and malnutrition. 

Some communicable diseases, such as cholera, require public health authorities to implement immediate quarantine procedures, to help avoid the initial outbreak becoming an epidemic. 

Those with respiratory conditions may be exacerbated by exposure to mould, microbes or other air-borne irritants, such as chemicals used during clean-up of floodwater damage.

People with a pre-existing history of chronic respiratory disease (for example, emphysema) or an impaired immune system, have a relatively greater risk of suffering acute respiratory complications.

Injuries sustained during the fighting and fleeing of any disaster, as well as back injuries sustained in the clean-up, can have long-lasting effects for the community, as it may prevent people from returning to their jobs and may mean an increase in associated claims.

Psychological symptoms such as stress and fear are well-recognised, common human behavioural responses during any natural disaster.

However, the causes of a related chronic mental illness tend to be more variable and associated with complex health and social issues; for example, the presence of physical disease or complications, social dislocation and disruptions, together with personal losses and economic hardship.

As we experience more regular extreme weather events in the ‘disaster’ category, mental health issues including conditions such as Post Traumatic Stress Disorder (PTSD) could become more prevalent in our society.

The available research also highlights that most people exposed to traumatic events recover well with support from family, friends and the community, without going on to develop long-term mental illness.  

For people who don’t recover as well, PTSD is only one possible complication, with anxiety, depression, substance abuse and other physical health problems also common.

However, PTSD is the main psychiatric diagnosis associated with specific traumatic experiences. 

The potential mental and physical health complications of severe natural disasters are directly relevant to Life, Trauma and Disability Insurance benefits, so the recent tragic events across the country highlight the inherent value of such products to all Australians.

In ensuring they are prepared for these types of events, insurers must have a number of pro-active procedures in place to ensure claims handling is swift and taken with the utmost care and sensitivity. 

And these disasters, while tragic, are a moment of truth for the industry to provide a valuable service. This in turn creates greater awareness for the important role financial advisers play in ensuring their clients have adequate levels of risk cover. 

CommInsure closely monitors these significant events, including any related health impacts as they unfold.  As always, insurers should be well-prepared and absolutely committed to supporting their customers and advisers in their time of greatest need.

Michael Browne is the general manager of business services at CommInsure.