Insurers already have sufficient information available to accurately measure flood risk in Australia, says natural hazards expert Russell Blong. In a comment from the floor during a flood insurance seminar in Canberra on Friday, Professor Blong said the information available on flood risk is “better than for bushfire or earthquake, which the industry covers”.

His comments came during a lively interactive session, with public servants specialising in emergency services planning, insurance professionals and natural hazards scientists.

The seminar, hosted by the Insurance Council of Australia, highlighted the work being done by several Federal Government departments in response to a call by the Council of Australian Governments to develop a five-year risk assessment program for natural disasters and a “nationally consistent system of data collection, research and analysis”.

Finity Consulting CEO Colin Brigstock told the seminar data on flood risk is limited in its coverage, comprehensiveness and consistency. “Any study of potential flood risk therefore can only be broadly indicative,” he said. “Improving the base data will be an important first step in developing a viable solution.”

He says as many as 58,000 dwellings in Australia are exposed to flooding in 1-in-10 year floods; a further 175,000 in 1-in-20 year events; and 435,000 to flooding in 1-in-100 year floods.

If flood insurance was available for homes in the 1-in-10 year flood zone, the premium would be $3000, while those in the 20-year zone would pay $1400.

Peter Zimmerli, Head of Natural Hazards at Swiss Re’s Hong Kong office, told the seminar that the various flood insurance programs used in the US and Europe show the best solution lies in a partnership between the insured, the insurers and the state.

“The insured must take preventative action to minimise damage, and must participate in losses through significant self-retention,” he said. “The industry must automatically provide flood cover, except where risks are too high, and the state must raise awareness of the flood risk, guarantee to invest in flood control works and deny compensation [to the uninsured] in case of a disaster.”

He says there is no technical obstacle to comprehensive flood cover, as long as insurers are able to build up a large risk community and there is adequate information to assess. Economic viability must be guaranteed. “A smart insurance scheme offers more long-term benefits than a tax-money relief effort by a government after each event.”