Australia looking at insurance premium increases

Austrailia's Cyclone YasiMany predict insurance rates to increase in upcoming years for Australians due to a relentless wave of natural disasters thrashing the countryside. How much of an increase is hard to say, analysts and insurance companies are calculating the total financial loss from the Queensland flood and Cyclone Yasi, and will adjust accordingly.

Wild figures being thrown out of 30% rate increases have been talked down by Patrick Snowball, chief executive of the Suncorp Insurance Group, the largest insurer of Australia. Stating it’s still too early to tell but insurance companies will be taking losses into consideration.

Snowball did comment on the key component in any rate increase being, ”we’ve got to understand is if this becomes a year in, year out problem, then re-insurers are not going be looking to their premium being risk mitigation in Australia, they’re going to think it’s going to carry a premium.” Also, he cited other key factors being global warming that could change risks as well.

Insurers are hiring outside firms to access costs on top of the all ready reported losses from the Victoria floods.

The Baillieu government is expected to offer 15,000 clean up flood grants to small businesses in lieu of this weekend’s down pour. Insurance companies are starting to get calls from the rains but it’s still too early to report how severe this weekend storm is going to be on property loss.

The economy is also taking a hit from weather related events. Small business owners are losing revenue along with the looming threat of insurance hikes – yet another hit for the business sector.

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