Suncorp rewards Queensland town
The chief executive of Suncorp's personal insurance division, Mark Milliner, will travel to Charleville on Wednesday to announce that customers in the outback town will have their home and contents premiums fall by $400 on average to about $990 the next time they renew their policies.
The reduction follows the completion of a $20 million levee and diversion project that reduces the risks of inundation for the town. Without spending on such earthworks, the average premium would be $3000 a year.
Suncorp sparked anger last year when it blacklisted the nearby towns of Roma and Emerald after three major floods in as many years, to highlight the heavy costs of not investing in mitigation efforts. Customers were said to have complained that premiums had risen as much as tenfold after the move.
"We paid out over $100 million in claims, and governments would have paid that much and more," Mr Milliner said.
The company said earlier this year that Roma had been discussing the construction of a levee since 2005, with the cost between $2 million and $10 million. The cost of rescuing residents from in and around Roma by helicopter in 2011 alone cost about $10 million.
Since then the issue of mitigation has gained national attention, with the Gillard government pledging $7 million in February and the Queensland government $13 million to build a levy at Roma.
The Greens are also going to this election pledging to lift annual federal spending on mitigation for floods, fires and other disasters from $50 million to $350 million, with the increase paid for by a levy on thermal coal exports.
Work on Roma's project could begin within a month and take from nine months to a year to complete, Mr Milliner said. Emerald, meanwhile, is planning to spend $14 million on flood protection.
Even so, Suncorp will not resume coverage in Roma or Emerald until it can determine how much the risk has been reduced.
The insurance industry applauded last week's report by a Senate inquiry into extreme weather events from climate change. The inquiry recommended a range of measures including better flood mapping and strong codes to make buildings more resilient.
"Queensland does have a higher risk from catastrophes than some of the other states," Mr Milliner said. "But clearly, there are areas of flood in every state and we want to work with governments to understand the risk."
Frequently Asked Questions about this Article…
Suncorp said its personal insurance chief Mark Milliner will travel to Charleville to announce that home and contents premiums for customers there will fall by about $400 on average to roughly $990 when they next renew, following completion of local flood mitigation works.
The $20 million levee and diversion project reduces the town's inundation risk, enabling Suncorp to lower premiums. The article notes that without such earthworks the average premium would be around $3,000 a year, underlining how mitigation can materially cut insurance costs.
Suncorp blacklisted Roma and Emerald after three major floods in as many years to highlight the high cost of not investing in mitigation. Customers complained premiums rose dramatically—by as much as tenfold in some cases—after that move.
No. Suncorp has said it will not resume coverage in Roma or Emerald until it can determine how much flood risk has been reduced by mitigation works and other measures.
Roma has discussed a levee since 2005 with estimated costs between $2 million and $10 million; the federal government pledged $7 million and the Queensland government $13 million for a Roma levee. Work could begin within a month and take nine months to a year. Emerald is planning about $14 million in flood protection spending.
Suncorp said it paid out over $100 million in claims related to these events, and noted governments would have paid as much or more. For everyday investors, that highlights how extreme weather losses can materially affect an insurer's payouts and the value of mitigation efforts.
The insurance industry welcomed a Senate inquiry report recommending better flood mapping and stronger building codes to make buildings more resilient. The Greens proposed increasing annual federal mitigation spending from $50 million to $350 million, funded by a levy on thermal coal exports.
The article shows that tangible mitigation works—like levees—can lower insurance risk and premiums, while repeated disasters can prompt insurers to restrict coverage or raise prices. Investors should note insurers are engaging with governments on risk mapping and resilience, which can influence future claims costs and underwriting practices.
Call 1300 880 160
Start a chat
Schedule a call
