Governments that allow high-risk property developments are putting communities at risk and pushing up insurers’ costs, Suncorp Personal Insurance CEO Mark Milliner warns.

They also risk higher premiums and lower levels of bank lending, he told the Urban Development Institute of Australia’s congress in Brisbane on Friday.

Suncorp’s reinsurance costs have more than doubled to $500 million a year in the past three years, Mr Milliner says.

In towns such as Wagga Wagga in NSW and Goondiwindi in Queensland, mitigation has spared large areas from floods, while in Roma and Emerald communities have been repeatedly devastated.

“For an insurance company, alarm bells ring when you are paying $200 million in claims for a region, yet collecting only $2 million in premiums.”

He says it is “concerning” to see development in areas that are clearly risky, such as flood-threatened mining towns in Queensland and sites at the base of the Warragamba Dam in western Sydney.

“There are 43,000-plus properties at the base of the dam that would be inundated if the dam failed – and yet we build more,” Mr Milliner said. “I am concerned when I hear local governments say development in high-flood-risk areas is ‘inevitable’.”

Recent comments to that effect by Brisbane Lord Mayor Graham Quirk are short-sighted given the city council’s bill from its last flood was more than $500 million, he says.

The community met the bill through higher rates and federal levies. “How do authorities who sign off on these high-risk developments explain their decisions to those families negatively impacted as a consequence?”

Without mitigation affordable housing will become a myth, disaster-hit communities will be abandoned and banks may reduce lending for developments considered risky, he says.

There is no better mitigation than restricting high-risk development and enforcing strong, nationally consistent building standards.

Mr Milliner says governments, developers and the insurance industry must work together.

In the Queensland town of Grantham, governments and insurers struck a deal to swap private and public sector land, moving properties from beside creeks and gullies to the top of a hill.