It was a bit like South Australia’s Elon Musk moment, for the built environment.
There was the Insurance Council of Australia’s chief executive Rob Whelan on Wednesday morning being interviewed by Fran Kelly on Radio National. Also in the studio was Karl Mallon, a director of Climate Risk, a company that provides risk assessment to local government and other institutional owners on their infrastructure exposures to surging storm water and floods.
The flood waters were still rising in Queensland and northern NSW.
So many people were suffering huge losses to their homes and businesses. There had been loss of life. Crop failures, rising food prices. Yet more catastrophic damage from severe weather events that are becoming far too frequent.
It might take a while to slow the rate of climate change, but according to Mallon in the meantime there’s quite a lot we can do to slow the rate of damage to people and property that stands in its way.
Mallon said the data exists.
The ICA has that data, he said. It’s been obtained from councils often at huge costs, paid for by the taxpayer. But the insurance companies use it to create their own commercial product and refused to share it.
If the ICA shared its data with his company, Mallon told Radio National listeners, he could provide a service to home owners that could detail the risks to their properties. And he would make it free of charge.
The challenge, this gauntlet tossed to the floor, was reminiscent of Elon Musk in discussions with Atlassian’s Mike Cannon-Brookes a few weeks ago, that he could build a huge battery storage plant for South Australian in 100 days or it would be free of charge.
Powerful stuff.
The Fifth Estate soon called Mallon and asked him to expand on his offer. What did he mean exactly? What was the data that the insurers had and not everyone else? We called the Insurance Council.
There was argy-bargy.
Mallon said there were equity issues at stake.
“We can work out how current risk of coastal inundation or fire and look at essentially the change in risk costs and adjust the house value,” he said.
A spokesman from the ICA said risk data was totally available to everyone. You could go to the ICA site, tap in your address and up would come a box with an outline of risks of flood and bushfire. He demonstrated.
That’s not the kind of data that is meaningful, Mallon said in reply.
What Mallon wants from the ICA is Geographical Information Systems (GIS) data in downloaded form to perform the complex risk calculations.
In an email to The Fifth Estate he elaborated:
The ICA have a “data globe”, and you can look at the pictures and maps. But that’s not useable for risk assessment. Why? To compute the risk to a property you to know (a) the water depths for (b) several return frequencies. That is, several flood maps for the same location.
So what one needs are the original GIS digital flood maps. From there our systems extract the data and then create inundation probability curves for each data locations, and projected forward with CC and thus calculate the risk of overtopping an individual property.
According to the ICA, the problem is that – though they can take these maps and show them on the web site – they are only allowed to use the raw digital data for internal insurance calculations within ICA and their membership. So they don’t believe they have the right to share it with us.”
The problem, he explained, “is that insurers and councils end up knowing everything about the risk to a home, but the people who don’t know are the people who own the place! How are they supposed to act on market signals, if there is no signal?”
The ICA also said that the data was freely available from local government.
Technically, yes, Mallon said. However, it was limited. Councils would provide flood data for one square kilometre to an architect or anyone intending to build on a particular site, however, it was not feasible to collect all the data that would make analysis meaningful square kilometre by square kilometre.
Mallon said one council in NSW provided significant barriers.
“We tried a freedom of information request since the data is paid for the by the taxpayer and we’re doing a public good and they got us on a technicality.”
“In principle, they said we could have it but we would have to pay $300,000.”
His understanding is that the ICA is not paying for the data.
“Their argument is that, ‘if our members don’t know what’s going on, we will assume the worst and we will put in high premiums’ and the councils say, ‘we don’t want that’.”
“So they have that data for their members to make commercial decisions but we say, ‘don’t you think people who are buying a house and considering whether a place is going to be insurable should have the same right to that information?’”
The ICA also sent an emailed response to our queries with general manager of communications and media relations Campbell Fuller urging government to step in to solve the problem.
Mr Fuller said:
“The Insurance Council of Australia supports the notion that natural hazard data should be more freely available, however, the ICA is not the most appropriate body to facilitate this. Flood data held by the ICA is provided by local governments under strict licensing conditions to be used only for insurance purposes.
“The ICA does not own the data, and is not legally permitted to provide this high quality geospatial information systems (GIS) data to other parties. Dr Karl Mallon has been briefed by the ICA on these restrictions on several occasions.
“Local councils typically have the most accurate data on natural hazards in their area, including flood and bushfire risk maps. The ICA believes governments are the most appropriate bodies to ensure this information is available to all community members, including those who may choose not to purchase insurance.
“The ICA has previously recommended that governments establish a publicly-funded and freely available central portal for natural hazard data. Several state governments are already moving in this direction. Queensland makes available all GIS natural hazard data, and New South Wales has agreed to do so.”
Eventually Mallon followed up on Thursday with an open letter to put his offer on the public record.
- Read the full letter here