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Prepare for tough bushfire season, says Aon Benfield

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Insurers should prepare for a severe bushfire season as the dry winter takes its toll, Aon Benfield warns.

It says more than 1 million homes across NSW are at risk from bushfire, and understanding exposure is key.

The reinsurance broker’s Head of Analytics, Peter Cheesman, told tools are available to help insurers rate the risk.

“This goes down to individual property levels, and the key factor is how far the property is from bushland,” he said. “A lot of insurance companies have been rating bushfire risk at address level for quite a long time now.”

Aon Benfield also has live monitoring tools running 24/7, using information from each state’s rural fire service and the Bureau of Meteorology.

“We have feeds using satellite data that show which areas are exposed to fire at any one time,” Mr Cheesman said. “An insurer can check to see whether its clients are exposed, and help them to manage their risks.

“Once a fire kicks in it also enables them to calculate whether it is going to be a major incident for that insurer and whether they need to mobilise claims staff.”

Mr Cheesman believes Australia is vulnerable to fires on the scale of those that recently devastated California.

“The fires in Victoria in 2009 were at that level. But just because there is the potential for a severe fire does not mean it will happen.”