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| John and Sharon Payne outside their Westlake home that was inundated during the 2011 flood. |
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| The 'mud army' who turned up to help Westlake flood victims John and Sharon Payne. |
INSURANCE companies pocketed an extra $1.1 billion in profits after Queensland's 2011 floods, with huge premium increases boosting balance sheets.
The industry's price hikes were even levied on residents who were unaffected by the floods.
The cost spike has led consumer groups and residents to accuse insurance companies of gouging, using the floods as an excuse to inflate premiums.
Annual insurance bills have jumped across Queensland but the worst insurance increases were reserved for flood victims.
John Payne and his wife, Sharon - who suffered almost 1m of water through their Westlake home in Brisbane's Centenary suburbs - opted out of flood cover last year after RACQ raised their annual premium from $1600 to $8500.
Mr Payne's broker checked seven other insurers for quotes including flood cover, without finding an affordable option.
The quotes ranged from $6500 to $19,000 a year. Mr Payne opted for a non-flood policy with AAMI at a cost of $3300.
"I'm betting the (Wivenhoe) dam will be managed more appropriately in future," he said.
Gary Huang, another flood victim in the Centenary suburbs, said his insurance premiums had doubled since the flood even though he had a $5000 excess on his property.
Queensland Consumers Association secretary Max Howard paid 10 per cent more in home and contents insurance premiums on two properties in Kenmore and Regents Park, neither of which flooded.
"It's like car insurance or any insurance ... you know it is going up but usually it goes up slightly, like 3-4 per cent. But last year my home policy really jumped up," he said.
He is dreading his next home insurance bill in March after hearing horror stories about soaring premiums.
Paying more to insure property that didn't flood "isn't fair", he said. The Australian Prudential Regulation Authority, which regulates insurers, publishes quarterly and annual statistics on the profitability of the insurance industry.
Since the 2011 floods, general insurers reported good overall financial results, although down from previous years. Insurers increased their net profit after taxes from $3.08 billion to almost $4.23 billion from September 2011 to September 2012 - the most recent figures available.
Revenue from net premiums climbed to $26.9 billion from $24.8 billion. In 2008, premium revenue was $22.8 billion.
General insurers earned a 16 per cent return on net assets.
A spokesman for the Insurance Council of Australia said financial performance was a matter for individual insurers.
"APRA requires the industry to operate profitably," he said.
General insurers write a wide range of policies on homes, cars and boats, covering theft, fire, collision and water and wind damage.
The Insurance Council declined to disclose average premium increases in Queensland since the flood, even though firms have the information.
"The Insurance Council of Australia does not have a data collection role," in disclosing that information, the spokesman said.
The Financial Ombudsman Service also had no premium information, saying collecting that data was "outside our terms of reference".
The ICA says it is difficult to generalise about premiums because they relate to unique properties with a variety of risk factors and because insurers are free to price competitively.
"Insurers base their pricing on factors and data each company deems appropriate," an ICA spokesman said.
"Each insurer has its own method of calculating premiums based on a range of factors, including government flood mapping and land surveys, historical data, claims frequency, risk and weather forecasts.
"Areas that have a history of natural disasters or an exposure to future events may have experienced sharper premium rises," an ICA spokesman said.
Siddharth Parameswaran, a senior insurance analyst for JP Morgan, said home insurance premiums increased nationwide by 10 per cent in 2011, and were forecast to rise by another 5 per cent.
7.1.13
COMMENT: The rapacious insurance companies have been caught out slugging customers again. Far from being sent to the wall over their payouts in the 2011 Brisbane River flood, these companies are flourishing again with inflated premiums combined with massive lurks and perks for the fat cats running these organisations. One couple at Goodna had their annual insurance premium after the flood jump from $800 to $8000 per annum. Greed is all that keeps some of these companies going.
