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| Some insurance companies argue compulsory flood cover avoids uncertainty for customers. |
ALLIANZ is considering joining the ranks of insurers making cover for floods compulsory for homeowners in high-risk areas.
The decision means some people will have a reduced choice about getting cover if they do not want flood protection, which can be prohibitively expensive in zones prone to such catastrophes.
In Queensland, insurance brands including Suncorp, RACQ Insurance, NRMA and CGU have compulsory flood cover.
Allianz, part of a German-based group and Australia's fourth-largest general insurer by premiums, currently offers people the choice to opt out..
"Because most other insurers have adopted a model of 'automatic' flood cover for domestic properties, that is, not allowing householders to opt out of flood cover if they do not want it or can't afford it, Allianz's concerns about accumulating excess exposure to flood risk has forced us to re-visit the approach of offering optional flood cover for direct customers," an Allianz spokesman said yesterday.
Some insurers have argued compulsory cover avoids uncertainty for customers.
Some brands were hammered in the 2011 floods when customers complained of confusion about policies that covered for flash downpours but not river flooding. The Federal Government has been considering whether to make opting out compulsory.
It comes as a KPMG survey out yesterday found earnings of insurers in Australia fell 18.5 per cent to $2.5 billion in 2012.
Insurers were hit in the year with paying a larger share of costs of a series of smaller weather disasters, KPMG found. In large disasters, insurers are somewhat protected by their own reinsurance cover.
The amount of premiums reaped rose 8.3 per cent to $28.6 billion.
KPMG insurance partner Ian Moyser said insurers "continue to have a keen focus in terms of pricing for the risk that they are underwriting".
This year saw the shock step of Suncorp in April declaring it would cease writing new policies in Queensland's Emerald and Roma, citing concerns about local flood mitigation policies. A Suncorp spokesman yesterday said it was open to revisiting this decision, when local authorities provided details on proposed mitigation measures.
Allianz started offering optional flood cover this year but said "changes in market conditions forced the suspension of the flood cover option in a couple of Queensland towns in order to avoid an unacceptable over-exposure to flood risk".
Maranoa Regional Council Mayor Robert Loughan maintained Suncorp's actions were "not good form". He said locals had been hit by increased premiums from insurers, up to 1300 per cent in one case.
The decision means some people will have a reduced choice about getting cover if they do not want flood protection, which can be prohibitively expensive in zones prone to such catastrophes.
In Queensland, insurance brands including Suncorp, RACQ Insurance, NRMA and CGU have compulsory flood cover.
Allianz, part of a German-based group and Australia's fourth-largest general insurer by premiums, currently offers people the choice to opt out..
"Because most other insurers have adopted a model of 'automatic' flood cover for domestic properties, that is, not allowing householders to opt out of flood cover if they do not want it or can't afford it, Allianz's concerns about accumulating excess exposure to flood risk has forced us to re-visit the approach of offering optional flood cover for direct customers," an Allianz spokesman said yesterday.
Some insurers have argued compulsory cover avoids uncertainty for customers.
Some brands were hammered in the 2011 floods when customers complained of confusion about policies that covered for flash downpours but not river flooding. The Federal Government has been considering whether to make opting out compulsory.
It comes as a KPMG survey out yesterday found earnings of insurers in Australia fell 18.5 per cent to $2.5 billion in 2012.
Insurers were hit in the year with paying a larger share of costs of a series of smaller weather disasters, KPMG found. In large disasters, insurers are somewhat protected by their own reinsurance cover.
The amount of premiums reaped rose 8.3 per cent to $28.6 billion.
KPMG insurance partner Ian Moyser said insurers "continue to have a keen focus in terms of pricing for the risk that they are underwriting".
This year saw the shock step of Suncorp in April declaring it would cease writing new policies in Queensland's Emerald and Roma, citing concerns about local flood mitigation policies. A Suncorp spokesman yesterday said it was open to revisiting this decision, when local authorities provided details on proposed mitigation measures.
Allianz started offering optional flood cover this year but said "changes in market conditions forced the suspension of the flood cover option in a couple of Queensland towns in order to avoid an unacceptable over-exposure to flood risk".
Maranoa Regional Council Mayor Robert Loughan maintained Suncorp's actions were "not good form". He said locals had been hit by increased premiums from insurers, up to 1300 per cent in one case.
www.CourierMail.com.au
26.9.12
