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Insurers accused of abandoning alpine tourism sector

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Alpine resort operators say insurers have “over-reacted” to the growing bushfire threat, making insurance cover unaffordable or unavailable.

As insuranceNEWS.com.au has previously reported, many sectors including caravan parks and regional pubs have already been hit by reduced underwriter appetite following last year’s devastating fires.

Now the Mount Buller Ratepayers Association (MBRA), which represents stakeholders in the Victorian alpine region, has added its voice to growing concerns, saying that insurance for alpine properties has become a major issue.

The association claims some insurers, including QBE and Allianz, stopped offering alpine insurance this year, while other providers carved out bushfire risk or introduced unaffordable premium increases. It says that underwriting agency Miramar, which held a large amount of Mount Buller business, also cut bushfire exposure.

QBE says it does still cover alpine risks, however, and Miramar says that while bushfire exposure was reduced earlier this year, the sub-limit has now been lifted.

“Premiums have escalated to unaffordable levels,” the MBRA says. “Some underwriters have withdrawn from the alpine market.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 the Government to find “an affordable solution”. It carried out a survey earlier this year and found 67% of members were without bushfire cover.

Committee member Chris Hollier told insuranceNEWS.com.au the issue is not specific to Mount Buller and is “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 over-reaction 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,” the council 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”.

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

A Miramar spokesman told insuranceNEWS.com.au that it writes an alpine facility through Network Insurance Group (NIG), which it has partnered with for three years.

“In May this year, we reduced our bushfire exposure to a sub-limit of $250,000 per location,” the spokesman said.

“We have worked tirelessly with our security partners and NIG to have this sub-limit lifted so that we are now in a position where we can offer bushfire to the full value of the location.”