Could the general insurance industry have missed out on a seat at the Federal Government’s new roundtable on climate change because the legislators don’t understand the industry’s role?

Neither insurance companies nor the Insurance Council of Australia (ICA) are represented, although the National Australia Bank and the Investor Group on Climate Change did get a seat.

The Investor Group represents a number of major fund managers and superannuation funds in Australia and NZ.

A spokesman for Treasurer Wayne Swan told insuranceNEWS.com.au these two members were the “representatives of the financial services industry”, which by association would include insurers.

“The Government sought a broad representation of companies and non-government organisations across the economy and the community, but of course we were mindful that this needed to be a workable size,” he said.

“The Government has sought a broad representation of companies and non-government organisations to inform the Government’s climate change policy, and that is what we have achieved.”

The spokesman says ministers will continue to be available to discuss issues with all parties as the Government develops its policy position on the topic.

ICA has told insuranceNEWS.com.au it will focus on working with the Government through the National Resilience Strategy.

“Rather than a singular focus on carbon pricing, which is more of a direct issue for other industries, the focus for the general insurance industry is to assist in increasing community resilience to extreme weather events,” a spokesman told insuranceNEWS.com.au.

The spokesman says ICA is working through the Council of Australian Governments’ National Resilience Strategy to improve the Building Code of Australia.

“It also supports risk-appropriate use of land as the urban footprint expands in Australia and puts the focus on mitigation programs for at-risk communities through flood levies, while encouraging greater community understanding of the risks of extreme weather and actions to ensure their recovery.”

But while ICA is apparently sanguine about being ignored for a seat at the roundtable, some major members are less accepting of the exclusion.

A spokesman for Suncorp told insuranceNEWS.com.au “it was surprising that there is no representative from the general insurance sector”.

“The Government is to be commended on forming the roundtable,” he said. “Consultation with industry is important when considering major issues such as climate change.

“The lack of a representative from the general insurance sector on the Government’s climate change roundtable does seem to be an oversight.”

Zurich Financial Services Australia CEO David Smith believes the industry should have “a voice and an active role” at the discussions.

“The general insurance industry has played – and will continue to play – an important role in the community when weather-related disasters strike,” he told insuranceNEWS.com.au.

“The fact that the insurance industry is not represented is a missed opportunity for the Government to gain valuable insights into climate risk.

“The industry would make a vital contribution to discussions on the issue.”

Insurers are among the original lobbyists on the subject of climate change, having recognised early the impact of climate change when they began picking up some large bills from abnormally wild weather events.

Suncorp CEO Patrick Snowball said in a speech last week that the insurance industry accounts for 10.8% of Australia’s total gross domestic product.

It also pays out about the same amount in claims each year as the recent Federal Government stimulus package.

“During the same period, the gross incurred claims reported by the general insurance industry were more than $23 billion,” he said.

“Our industry was injecting back into communities broadly the same amount of money as the major government stimulus packages.”

Mr Smith says Zurich has taken a leadership role in Australia on the issue of climate risk, being the first insurer to introduce automatic flood cover for commercial clients; undertaken with the National Insurance Brokers Association an annual national survey of brokers on climate risk; and established a climate risk training program for brokers.

The roundtable has been welcomed by the industry, but while most won’t be pressing for a seat, Zurich and Suncorp have said they would accept if asked by the Federal Government.

“Zurich would welcome an opportunity to participate in the roundtable and bring its global risk knowledge and experience to the discussions,” Mr Smith said.

“It’s interesting to note that the national broker survey showed that brokers and their clients are very concerned about the issue and believe the insurance industry has a key role to play.

“This clearly demonstrates the industry should be represented at the roundtable.”

Suncorp is also aware of the impact on climate change, especially in areas such as Queensland, New South Wales and Victoria where climate change impacts are the most severe.

“We have the management expertise to make an important contribution to the roundtable,” the spokesman said. “The group would be pleased to provide a representative if invited.

IAG will be using its membership of the Business Council of Australia, which has a seat at the Government’s roundtable, to express its views on the topic.

“In addition to our ongoing dialogue with government on these issues, we are engaging with the roundtable process through our membership of the Business Council of Australia,” a spokesman said.

“IAG has been a consistent supporter of actions to adapt to the effects of climate change and mitigate its impact.”

While the general insurance industry obviously has a major information and support role to play in any high-level discussions on climate change, the questions remain: Does the Government really understand the industry’s potential input on climate change discussions? Why did the industry miss out on a place at the table? And can a bank and a fund manager really hope to represent the views of the companies that carry the risks? ­­