The lack of widespread flood cover in Australia is “far from ideal” and requires a greater government commitment, says Insurance Council of Australia (ICA) President Terry Towell.

Speaking at the National Insurance Brokers Association (NIBA) Convention in Sydney last week, Mr Towell, who is also MD of Allianz Australia, said the search for an adequate flood solution is being hampered by inadequate mapping, varying definitions and a narrow concentration of risk.

“Ten towns in Australia carry about 45% of the risk,” he said. “People in those regions are looking at a very high premium relative to the vast majority.”

Although ICA investment has helped boost flood mapping in the eastern states from 8% to 46% in the past three years, he says much work remains to be done.

“Governments will have to invest a lot more, as many deficiencies are not yet covered,” he told delegates. “Consider Maitland in the Hunter Valley – it’s only 47% mapped at present.”

Mr Towell says initiatives such as optional flood cover do little to solve the problem, as people most at risk are likely to opt out of the extra cover.

Too many houses continue to be built on flood-prone land and he wants greater government commitment to insurance funding pools.

“In most countries, this involves contributions from government, property owners and insurers,” he said.