Eagle Insurance Broker Candice Klau explains what is facing the insurance industry in the future after a terrible year of increased natural disasters.

“A record number of natural disasters in 2011 has proved to be some trying times for the Australia Insurance market. The average claims paid of $21 billion was well surpassed in 2011 with a total bill to Australian insurers of $33.5 billion. 

With many insures only testing the impact of one natural disaster on their balance sheets, the insurance regulating body APRA are now stepping in and asking insurers to be more rigorous with their testing and reinsurance arrangements. APRA want insurers to consider a range of extreme scenarios and multiple occurrences, not just one extreme event as it has previously been done. 

As a consequence of these events, global reinsurers have substantially increased their premiums to recover the losses they have paid out. In some areas of Australia the reinsurance cost is more than the current premium offered or reinsurers have just flat out declined to insurer particular risks or risks in certain areas. 

To deal with these increased costs, insurers have made a number of changes to their policies including hefty premium increases, additional restrictions and increased excesses. 

The next couple of months will see many changes in the insurance industry that’s for certain. 

To ensure you are always getting the best deal, talk to someone who knows what is going on and can help you navigate through the insurance minefield. Here at Eagle, we’ll look after you.”