Insurance industry needs to work harder to ensure flood cover for all

In the wake of the floods, and other natural disasters, there is a growing agreement, even among insurers, that it is essential for everyone to have insurance; not only those who can afford to pay market prices.

In other areas of essential service provision, we're used to governments intervening in private markets to ensure goods and services are affordable and accessible. We need to move to the same realisation for insurance.

By and large, consumers do trust markets to efficiently deliver quality goods and services that benefit them. However, markets don't exist for their own sake; they should improve consumer outcomes. Otherwise they have failed and intervention is warranted.

Rather than dealing in ideology, the insurance industry needs to acknowledge that, left alone, the market has not and cannot deliver for consumers. Should a flood befall us again tomorrow, claims will be denied and consumers will suffer. Insurers should work with governments, experts and consumers to propose effective solutions to community problems.

A competitive market for private insurance is part of that solution, but it should be one that ensures all insurance policies will cover flood risk for those that may need it on a rainy day.