Insurer slashes flood premiums

Insurer slashes flood premiums | Insurance Business

Insurer slashes flood premiums
Suncorp has slashed home building premiums in towns which were protecting their communities from natural disasters.

Residents in south-west Queensland town of St George would receive a 15% premium reduction upon their next renewal, following the opening of a new levee today built to protect the town. The change takes effect on 10 April.

Similar repricing will occur in Charleville, which recently completed a new levee, and other mitigation work including house raising and water diversions. Customers of the Suncorp Personal Insurance brands, which includes Suncorp Insurance and AAMI, in Charleville would have faced average home insurance premiums of more than $3000 without any flood mitigation being undertaken. The average home policy now costs approximately $990.

In the Queensland town of Roma, in which a new levee is currently under construction, it is estimated that a typical $300,000 home will see the cost of a home and contents policy drop by approximately 30%.

 “Suncorp has long promised that if councils and governments invest in flood mitigation that reduces the risks of natural disasters to properties, we will come to the table and reduce the cost of premiums,” said Suncorp Personal Insurance CEO Mark Milliner. “Risk reduction is the best way to make insurance more affordable, particularly for people living in communities exposed to disaster.”

NIBA CEO Dallas Booth has expressed delight at the fact that the Roma levee is almost complete, and called for tenders for further flood mitigation. He is also confident insurers would respond to reductions in risk by reviewing their premiums where appropriate.

“We need to remember that storms and flooding from ex-tropical Cyclone Oswald caused almost $1bn in insured damage at the beginning of last year, capping off several years of major natural disasters in Queensland which had a significant impact on insurers and the cost of their reinsurance.

“The role of insurance brokers is to represent policyholders, not insurers, and brokers in Queensland will continue to work hard to get the most cost effective cover for their clients,” Booth said.