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Insurance Business | 04 Apr 2014, 08:28 AM Agree 0
Brokers have sided with insurers over warnings against the government introducing a risk sharing model for natural disasters, and instead have put forward their own ideas for a solution.
  • Cobblers | 04 Apr 2014, 09:24 AM Agree 0
    Sounds more like brokers and insurers are scared of losing income by the creation of a catastrophe pool. How can you mitigate against climate change, earthquake, or cyclones?
  • Scott | 04 Apr 2014, 09:32 AM Agree 0
    In New Zealand they are setting up task forces to mitigate earthquake damage - they are going around inspecting where is most prone to earthquakes, then upgrading buildings & the like. For us across the tasman, the building of dams, levees, dykes & the like could help to lower flood damages. The building of sea walls or the like for tidal surge ... you get the idea.

    Where there's a will there's a way I imagine!
  • Mark | 04 Apr 2014, 09:41 AM Agree 0
    If everyone insured, and didn't skimp on their insurances by only buying on price, then you wouldn't need the pool
  • Paul | 04 Apr 2014, 10:17 AM Agree 0
    Governments generally step in when the market fails or cannot meet community needs. Increasing climate volatility and the scale of disasters means Insurers struggle to meet the twin demands of return on capital and policyholders. I joined the indusrty in 1968 and the mantra then said: insurers have been discussing a natural disaster plan with governments since 1945. Ad hoc private sector approaches such as offerring flood to most of us that don't need it , pricing out those that do, does not satisfy the public benefit test. Our geographically diverse and small overall population mean a disaster pool is essential. The indusrty can either control the agenda by giving leadership and expertise or be conscripted. Let's not hear any more of Suncorp special pleading.
  • Stone | 04 Apr 2014, 11:18 AM Agree 0
    Cobbler, you can certainly mitigate against flood, & bushfire. Cant say there has been too many claims if any for climate change...lol.
    Mark I totally agree, more fool those that dont insure or underinsure, no pity and certainly no charity.
    The implimentation of mitigation strategies ie; flood levees etc is with out a doubt the ideal immediate solution. It will prevent if not reduce losses incurred. Without such measures this "disaster pool" would need to be a bottomless pit as going on the regularity of such disasters ie; flood, & bushfire, the millions of dollars of damage caused would exhaust this "pool" in no time.
    The work created from projects such as levee, dam building, fuel clearing etc would also benefit our countries economic bottom line.
  • The Oracle | 04 Apr 2014, 12:35 PM Agree 0
    I absolutely agree with Paul. Home Insurance premium increases in Northern Australia have become a real cost burden to most families, chewing up a massive proportion of household budgets. Many households are sustaining premium increases in the thousands. The "every region should pay its own way" mantra might be OK where you have enough population to spread the risk. But to thrust that model on the relatively small population base North of the Tropic of Capricorn is just not feasible. In my view it's as flawed as the old 'market share at any price' mantra. There will be no option but government intervention. We are best to get on board and lead that discussion.
  • Cobblers | 04 Apr 2014, 12:55 PM Agree 0
    To "The Oracle" - I too fall under "the NQ" umbrella, and agree. What I think is that those South of this DMZ (sic) can't understand is the lack of insurers willing to participate in this geographic region, forcing a only few to carry the load and not the 'spreading of risk' as the basic principle of insurance. Hence much higher premiums for reinsurance due to capacity held. This cost is not spread across other geographic regions, so insurers can still gain market share with those that 'can't' up here...
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