An Australian insurance giant has come out in support of the new standard flood definition and claimed that it will be beneficial to the industry's brokers too.
Zurich has welcomed the new flood definition arguing it is an important step for the industry.
“Flood insurance can work – we know this from our experience since 2008, and even from the experience of other Zurich operations around the world,” said Zurich General Insurance CEO-designate, Daniel Fogarty. “We’re confident customers and brokers will appreciate the clarity and peace of mind that these new regulations offer.
Fogarty said that while the flood insurance debate and recent government inquiries have shaken up the industry, the new definition has put the industry on track towards addressing the flood issue.
“We will continue our existing practice of offering flood cover to commercial customers, and we’re pleased our definition of flood is complementary to the one put forward by the Gillard Government,” said Fogarty.
“It is in the bests interests of the customers to offer flood insurance, and that is why we were the first to market for commercial insurance.
“By offering flood insurance, underwriters ensure that the flood conversation with clients happens at renewal time, rather than claims time. This is a significantly better outcome for customers.”
Fogarty said the unfortunate circumstances of the Queensland floods last year have proven that there is a demand for flood product.
In 2012, Zurich claimed to experienced 29% growth for SME business packages in Queensland – a statistic made more remarkable given the insurer had negative growth in 2011. Additionally, its Queensland retention rate in 2012 climbed to 88% (from 80%).
“These are compelling statistics and prove that customers want a correctly priced and structured flood product,” added Fogarty.
“Flood mitigation has not always kept pace with modern property developments, never mind the increasing frequency and severity of weather events.”
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