ICA calls for better land planning in submission to inquiry
BETTER land planning and flood mitigation is essential to help lower insurance premiums, the Insurance Council of Australia has told a Senate inquiry.
The ICA made the comments in a submission to the inquiry looking into recent trends and the preparedness for extreme weather events.
As part of the lingering effects of the 2011 Queensland floods, many Australian insurance companies have had to increase their premiums offered to home owners due to a tougher global insurance market.
"Many Australian property insurers have responded to these changes with premium increases and by reviewing their risk exposure," the submission reads.
"Some insurers have subsequently taken steps to reduce their exposures to high risk areas if they could not achieve necessary premium increases commensurate with the risk in those areas."
The council argued the rise in insurance premiums charged to homeowners was not a result of an increase in extreme weather events, but the exposure of properties to the risks, due to "legacy issues" associated with poor past planning decisions.
"In other words, the increasing cost of insured losses over time it explained predominantly by growth in the number of insured buildings exposed to weather events and the nature of those buildings," the submission reads.
"That it is decision making regarding the built environment that is driving economic losses, by choosing to accept the construction of damage-prone property in hazard-prone areas, is a noteworthy finding."
The submission also cited the "partial withdrawal" of insurance for flooded areas of Emerald and Roma as part of its case, arguing if flood mitigation and better planning practices were in place, insurance premiums could be lowered.
But it also noted a major success in Queensland, with the state's reconstruction authority mapping flood risk and linking the risks to local government planning schemes to help inform development decisions.
"A difficult task that has had to traverse complex and layered development processes in the state," the submission reads.
"Success in one state is not enough to ensure that insurance remains affordable and available to all, or more importantly that all members of the community are protected from known hazards."