Insurer's push to band together on flood alerts
Australian insurers are wasting millions of dollars gathering data on hazards, such as floods, that should be pooled by the government and made public, a senior executive at IAG said.
"We want to have a single version of the truth," said Andy Cornish, chief executive of IAG's Direct Insurance division. "I think it's a nonsense - we're all spending millions of dollars to compete against each other."
Even the Insurance Council of Australia's data on risks was patchy, with NSW doing "a much better job" than counterparts in Victoria, Mr Cornish said.
Insured losses from the summer's floods and fires will approach $1 billion, the Insurance Council has said, adding to costly damage bills from floods in previous years. Reinsurers have said they are re-rating Australia after a series of disasters, prompting insurers to pass on the higher premiums to customers.
The Climate Commission on Wednesday warned that global warming was influencing weather extremes, including the past summer's record-high temperatures.
"I'm interested very much in the issue of what the climate's doing and how that may be impacting on how we think of insurance," Mr Cornish said.
One of the government's responses last month to a Productivity Commission report on climate change was to support its calls for improved co-ordination and dissemination of flood-risk information.
Mr Cornish said data must cover other perils, such as storm surge and hailstorms. "Storm surge has not been modelled anything like as sophisticatedly as floods."
Low-lying coastal regions are expected to face increased risk of inundation as sea levels rise and storms become more intense.
Separately, Mr Cornish said his NRMA unit had examined the prospect of introducing vehicle telematics into Australia but found the devices unlikely to appeal to most consumers.
Drivers with such devices in their cars could potentially receive lower premiums if the data demonstrates good driving habits.
One industry analyst has warned that IAG and Suncorp could see their dominance of motor insurance undermined if telematics found a market here.
Compulsory third-party insurance and the availability of insurance for younger drivers meant Australia did not have the same market gaps as some other countries.
Another issue is linking the data collected to an individual driver, while privacy problems have also arisen overseas.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free