Lunchtime wrap-up: major insurers quizzed on climate

Climate change and its impact on insurability dominated this morning’s parliamentary inquiry hearings on insurance.

Australia’s largest insurers IAG and Suncorp were asked directly whether they would support greater reductions in emissions of greenhouse gases.

Both said they would – but both also said it is not their major focus.

“Why aren’t insurers shouting from the rooftops more?” Greens leader Adam Bandt asked.

“As an organisation we support action on climate change,” Suncorp CEO Insurance Gary Dransfield said.

But he added that the insurer’s focus is primarily on mitigation and “nearer-term” issues.

IAG MD & CEO Peter Harmer told MPs that “everybody has a responsibility to do their bit in terms of climate change and emissions reduction” but stressed the importance of managing the transition.

Both insurers say that without greater focus on mitigation measures then insurance affordability issues will worsen.

Mr Harmer told MPs that improvements to building codes and planning processes are also needed.

Earlier this morning Youi warned it is experiencing “double-digit” increases in reinsurance costs.

But Mr Harmer says IAG has yet to see significant rises.

He said after Cyclone Yasi in 2011 increasing reinsurance costs led to premium rises of about 20%.

“I expect some sort of rise but nothing in comparison to what we saw 10 years ago,” he said.

The hearing will restart after lunch at 1.30pm, with funeral insurer Youpla and QBE set to appear.