ICA urges Government to reduce flood risk
Mandatory flood cover will not solve the problem of repeated flooding to at-risk areas, the Insurance Council of Australia (ICA) has warned.
ICA chief executive Rob Whelan urged the National Disaster Insurance Review to consider regulations to reduce risk to properties in flood prone areas so that homes are not lost in the first place.
“Forcing all Australians to pay extra to subsidise policy holders will neither fix the issue nor will it stop disaster events such as those we recently saw in Queensland and Victoria,” he said.
Given that 7 per cent of Australian properties are currently in flood-prone areas, Whelan said the Government would have a hard time selling an increase to the 93 per cent of Australians who are not in areas at risk of flood damage.
The ICA warned that mandatory flood cover would increase the cost of living for all Australians, or force them not to insure at all.
In its submission to the Natural Disaster Insurance Review, the ICA called on the Government to protect consumers.
“The Federal Government and COAG [the Council of Australian Governments] need to reach an agreement on national land policy for homes constructed on flood-prone land,” Whelan said.
“The real issue here is that the same areas flood on a persistent basis and we need to prevent this getting worse by better regulation,” he added.
Whelan said a compromise needed to be reached that prohibits the construction of residential property on at-risk land unless there is strict enforcement of development controls that reduce the risk to less than a 1:100 year return period. “We need to treat the cause, not the symptoms,” he said.
The ICA urged the Government to use some of the $5 billion in stamp duty and fire service levies each year from insurance consumers. “The funds are there,” Whelan said. “All it takes is the political will to address the real problem.”
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
