Australia’s IAG Warns on Changing Weather

Insurance Australia Group Ltd. (IAG) chief executive Michael Hawker warned that global warming seems to be leading to an increased incidence of high-cost storms and floods in Australia and New Zealand.

Hawker made the remarks in a speech to the Insurance Funds and Growth Conference in Sydney, as reported by Australian Associated Press and New Zealand’s One Zoom.

He noted that there is conclusive evidence that global warming is an ongoing phenomenon, and it’s accompanied by “an almost linear increase in the frequency and velocity of storms and of drier periods. In our view it’s only getting worse because what is causing it is car emissions and green house gases and they are increasing at the present time.”

For IAG, Australia’s largest general insurer, the storms like those in Melbourne in December 2003 are far costlier than the headline-grabbing bushfires. The insurer had 5,500 claims for house repairs in Victoria against 350 in the Canberra bushfires.

Hawker urged Australian councils to print flood plain information to deter further development in flood-prone areas. “When we go from El Nino to La Nina we will have massive floods, and we don’t cover floods. The reason why we don’t cover floods is because we still allow people to build homes on flood plains,” he indicated.
He’d like the local councils to start publishing flood maps, so that homebuyers can ascertain if the home they want to purchase is located in a flood plain.

He also noted that the level of natural hazards in 2003 was seven times higher than 2002 taking 75,000 lives, according to figures by Munich Re, which put economic losses at $US65 billion, up from $US55 billion in 2002.