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Frozen out: alpine resorts hit by spiralling premiums

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Alpine resort operators have criticised insurers for imposing huge rate increases or abandoning the sector altogether, as underwriters react to last year’s Black Summer of devastating bushfires.

The Mount Buller Ratepayers Association (MBRA), which represents stakeholders in the Victorian alpine region, carried out a survey earlier this year and found 67% of members were without bushfire cover.

The association claims some major insurers, including QBE and Allianz, stopped offering alpine insurance this year, while other providers carved out bushfire risk or introduced unaffordable premium increases.

QBE told insuranceNEWS.com.au that it still offers cover “above the snowline” but that each risk is assessed “on its merit”, while Allianz says alpine resorts may have been caught up in a recent review of bushfire exposure.

“Insurance for alpine properties has become a major issue in recent times especially since the 2019/20 bushfires,” the MBRA says.

“Premiums have escalated to unaffordable levels. Some underwriters have withdrawn from the alpine market. Others have imposed an unreasonable excess. Some stakeholders have been tempted to self-insure although this is contrary to lease requirements.”

MBRA says it is working with industry bodies and government to find “an affordable solution”.

Committee member Chris Hollier told insuranceNEWS.com.au the issue was not specific to Mount Buller and was “the same throughout the entire alpine area in Australia”.

“The majority of Mount Buller property will not be covered for bushfire going into the bushfire season,” he said.

“People are being forced to self-insure or run the gauntlet. It’s an overreaction by those insurance providers pulling out, and a profit grab by some that remain.

“I appreciate that there has been billions of dollars of bushfire claims but there has never been a lodge lost to bushfire on Mount Buller.”

Mr Hollier says an “alpine mutual” is being investigated as a possibility by a group of brokers but details are not yet clear.

The Insurance Council of Australia (ICA) says it acknowledges the need for affordable insurance in alpine regions and is “looking at ways we can address this important issue”.

“Reinsurers see Australia as a high-risk jurisdiction for many insurance products, and this is driving an increase in reinsurance costs which in turn may be having an impact on premiums for some customers,” ICA told insuranceNEWS.com.au.

“The cost of some premiums have increased following the black summer bushfires, as insurers are reassessing and repricing risk.”

ICA says a focus is needed on “the high level of risk for some building stock in bushfire and natural disaster prone locations”.

A QBE spokesman denied that the insurer had pulled out of alpine insurance.

“QBE continues to provide insurance cover to a range of customers with risks located above the snowline,” a spokesman said. “Our underwriting approach is to treat each risk individually on its own merit.”

Allianz told insuranceNEWS.com.au that alpine resorts are likely to have been impacted by a recent review of bushfire exposure.

“Against the background of the lengthening of the fire season over recent years and following the bushfires last summer, we undertook a comprehensive review of Allianz’s exposure to high risk bushfire zones,” a spokesman said.

“The review indicated that a reduction in our exposure to high bushfire risk was warranted and, while the review wasn’t targeted at alpine areas as such, they are often areas with high bushfire risk.”

As insuranceNEWS.com.au has reported, the hardening insurance market is causing problems for a number of business sectors, with caravan parks and regional pubs in bushfire zones also particularly affected.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has published a report describing unaffordability of insurance as a “national crisis”.