As has been the case in every recent flood in Australia, the different stances on flood cover by different companies has led to a great deal of criticism, with senior politicians and the media weighing in demanding “clarity and compassion”.

Assistant Treasurer Bill Shorten, who met Insurance Council of Australia (ICA) CEO Rob Whelan on Friday to discuss the floods, was careful in his comments to media following the meeting. He said he had asked the industry to handle claims speedily and treat claimants “flexibly and humanely”.

Prime Minister Julia Gillard has been less circumspect, calling for insurers to be “flexible” in deciding who is and isn’t insured, while Queensland Premier Anna Bligh wants them to be “compassionate” and Victorian Premier Ted Baillieu is urging them to “err on the side of generosity”.

The insurance industry’s public response to criticism has been low-key. An ICA spokesman told insuranceNEWS.com.au yesterday the council is responding to media criticism. She did not elaborate on how this is being done, beyond commenting that ICA is “stretched to the absolute limit and inundated with media”.

Several insurers have stated on the record they will not consider ex gratia payments to flood-affected policyholders. Others are saying nothing at all.

However, reinsurers have made it clear that insurers which didn’t offer flood cover will not be allowed to deviate from their contracts, and can’t expect them to consider financing ex gratia payments, either.