Indemnitycorp has claimed a “first” for the Australian market with the introduction of a flood excess buydown facility.

The new facility is similar to the company’s cyclone excess buydown facility, and will reduce a property insurance policy’s exposure to a flood excess.

Indemnitycorp Account Director Shane Aitken says flood and cyclone peril excesses “are certainly not new by global standards and are a result of recent weather events in Australia”.

“Just like those found in places such as Florida, the excesses are more than likely here to stay.”

Mr Aitkin says the new facility is timely, with predictions of more adverse weather forecast for the Australian summer.

“With another La Nina pattern looming for summer and a forecast of above-average rainfall, insurers and reinsurers are set to face further losses,” he said.

“This will certainly accelerate the increase in excess levels, and perhaps even hamper coverage availability in some flood-prone areas.”

Mr Aitkin says the new facility is being underwritten at Lloyd’s.