The insurance industry's failure to tackle flood cover is "ridiculous" and exposes a lack of leadership, Zurich CEO David Smith says.

Zurich announced earlier this year it will roll out flood cover across its commercial policies, prompting a chorus of complaints from competing insurers who consistently argue flood is an untouchable risk.

But Mr Smith told insuranceNEWS.com.au he will not bow to industry pressure, describing arguments against flood cover as "semantics".

"There is a view that has been expressed to me that others have tried to tackle flood and bowed to the pressure of the industry," he said. "Well Zurich won't.

"Most of the companies in this country have subsidiaries in New Zealand where they do cover for flood. In the UK, flood is covered. What is unique about Australia? It's just ridiculous.

"Every risk can be covered at the right price."

Citing the example of the NSW Central Coast floods in June, Mr Smith says most insurers are already paying flood claims, but they have been rebadged as storm damage.

"Why can't flood be covered?" Mr Smith said. "[Insurers] are paying for flood now, but we just aren't collecting the premium for it."

Zurich will finalise pricing and wordings for flood cover in the next few months.

Mr Smith expects other insurers to face some tough questions from their customers as a result of Zurich's actions. "It will cause insureds to ask the question, why can Zurich tackle the problem and you can't or won't? I am sure that is in the back of the mind of other insurers.

"The media are belting into us about insurers trying to wriggle out of claims. This industry deserves to have a far better reputation, but we are constantly shooting ourselves in the foot."