Whole world struggling to manage disaster risk

I was pleased to learn that the World Bank and Government of Japan are hosting the Sendai Dialogue tomorrow and Wednesday this week to discuss how the world better manages disaster risk. This is a critical issue because, assuming no action, we can expect greater loss of life and economic damage than we have seen previously. As the World Bank observes:

…unplanned growth of cities puts more people at risk. By 2050, the urban population exposed to storms and earthquakes alone could double to 1.5 billion.

All economies, developing and developed, are subject to disaster risk, and indeed recent floods and cyclones in Australia have revealed issues in our policy settings, and we have had action on improving flood insurance at least. Unfortunately the Federal Government has been slower to respond on strata insurance and, as noted by KS at Loose Change, the due date for a report from the Australian Government Actuary on this issue has passed (Silence on Strata).

I’m not necessarily convinced the Government needs to intervene in strata insurance, as recent premium increases might reflect insurance companies finally realising how risky it is insuring multiple units in the same building subject to the same risks. But we at least need to see the Actuary’s advice on the source of recent steep premium increases to reach a conclusion.

This is an issue that is causing a lot of angst in the North and Far North. As reported in the Townsville Bulletin today (Insurance price hike rallies homeowners):

NORTH Queenslanders have come out in force and backed plans to lobby insurance companies and all levels of government to keep skyrocketing property insurance charges in check.

A lobby group set up by unit owners from Airlie Beach, Townsville and Cairns is hoping to use people power to force insurance companies, state and federal governments and body corporate managers to reduce the cost of insurance for unit blocks in the region.

This entry was posted in Cairns, Cyclones, Floods, Housing, North Queensland and tagged , , , , , , . Bookmark the permalink.

2 Responses to Whole world struggling to manage disaster risk

  1. KS says:

    Quite good report of some of the issues here at Insurance & Risk: http://insuranceandrisk.com.au/c42db69f/Sky%20high%20-%20the%20crisis%20in%20residential%20stata%20insurance

    This also refers to several overlooked aspects such as the nature of strata as a hybrid category mandated under state legislation. It should also be noted that many are not aware that the body corporate management business itself is really as much an insurance business. Commissions from insurance to the manager for many buildings in NQ would likely be as much as, or close to, the base management fee. So both should to be considered together when a management contract is renewed.

    The business is almost entirely through managers and brokers which introduces several competition aspects itself. I found that last year when I attempted alternative quotes through a separate independant broker but couldn’t as insurers refused to quote to an alternative broker where they had already provided a quote on the same building to the designated broker of the body corporate manager.

    I’m not sure I have confidence in the AGA as the most appropriate to address the issues, or any reliance on information from the insurers given the poor quality of info they provided the parliamentary inquiry.

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