Insurers have a plethora of new and increased risks to manage, and it’s going to take a lot of industry discipline to get on top of them, according to IAG CEO Michael Hawker.

Speaking at the Insurance Council of Australia’s Insurance Outlook conference in Melbourne, Mr Hawker said the steady increase of global disasters each year is something the industry should be keeping an eye on. “Increases in storm activity across the eastern seaboard translate to increased claims’ costs, which will then be passed on to premiums.”

Insurers can’t play Mother Nature but some companies, including IAG, are using new technology to create different sized hailstones. “They then get to have fun and throw them at things to access the types of damage.”

Mr Hawker says flood is still the largest single cost for homeowners each year, and local councils should issue flood maps to insurers so they can assess which areas are plausible to cover. “Too many people build on flood plains and councils need to realise it is in consumers’ best interests to provide flood mapping.”

But changing weather patterns aren’t the only issue on insurers’ minds.

Mr Hawker says latent risks shouldn’t be overlooked – including nanotechnology, electromagnetic radiation from mobile phones and overhead powerlines, genetically modified foods, diseases related to raw materials (asbestos and silica) and arsenic poisoning from treated pine.

He says consumers now expect greater cover under their policies. “In terms of compulsory third party and workers’ compensation, we’re now seeing people claim for things that wouldn’t have been thought of 20 years ago when their policy was developed.”