Customers are warned that insurance premiums will be increased this year after the flooding in Queensland New South Wales and Victoria.
JP Morgan and Deloitte expect insurance rates should rise by more than three times the annual inflation rate.
Their joint general insurance industry survey shows that before the floods, the industry was predicting an 8 per cent increase in household premiums.
Deloitte spokeswoman Elaine Collins says the survey is based on responses received in September and insurers will now have to factor in the impact of recent weather events.
“That number really doesn’t include allowances for the Christchurch earthquake or the Queensland floods, because that was really a number that was from June 2010 to June 2011,” she said.
“It’s possible that number might be higher because of the Queensland floods.
“Insurers will be looking at the impact and deciding how much their rates need to increase.”
While the survey was conducted before the floods, co-author Siddharth Paramesweran says the disaster is likely to have an impact on the way insurers operate.
“They will try to adjust their models, adjust their rates to the extent that they can,” he said.
“They will reassess their approach to flood modelling, I think that’s a longer term issue.
“I think that there is likely to be some change coming.”
Source : ABC News
