Zurich Financial Services Australia CEO David Smith is disappointed that an industry approach to a common flood definition for now appears dead and buried.

“The Insurance Council of Australia proposal process was a bit of a shambles,” he said at the NIBA Convention in Darwin yesterday. “I’m quite disappointed that lawyers and regulators succeeded in not providing clarity within the industry.”

On September 3 the Australian Competition and Consumer Commission denied an application by ICA to introduce a common industry inland flood definition.

Mr Smith was speaking at an industry issues panel session moderated by insuranceNEWS.com.au Publisher Terry McMullan. He says insurers, regulators and governments now must improve efforts to increase flood cover availability and reverse the current inconsistent approach.

“Often when you have a catastrophe some insurers will simply classify it as storm damage and insurers currently have so many different definitions,” he said. “If it was as easy as that it would have been solved years ago.”

Zurich introduced automatic flood cover on its commercial insurance policies in Australia on September 8.

Mr Smith says the move is intended to provide a meaningful development within the Australian market, and that Zurich is prepared to extend the cover to high-risk clients.

He defended Zurich’s right to exclude properties facing an unacceptable level of risk.

“We price risk, we don’t pay certainties,” he said. “We are not a cash machine.”