Insurance companies dropping out of parts of Queensland

The question has often been floated as to whether insurance companies would withdraw from the New Zealand market, or parts of it such as Canterbury. If the Queensland experience is anything to go by the answer is: yes they might withdraw.

The following extracts are from an article on insuranceNEWS.com.au here.

Lumley Insurance is the latest insurer to withdraw from property cover in north Queensland following big losses last summer.

A Lumley spokesman says the “ongoing volatility and changing reinsurance conditions” in the region have led to a review of guidelines for business in this region.

“Commencing October 15, we will no longer be able to offer household, landlords, fire and perils (ISR and business pack) or contract works for risks situated in postcodes 4737 and above,” she told insuranceNEWS.com.au.

Far North Queensland Insurance Brokers Director Doug Olson says property cover is becoming increasingly hard to place, and the region can’t afford any more withdrawals by insurers. Only four major insurers are still writing property business in the region.

There is also a bit about a state government-run insurance office being set up again:

While he hears a continuing loss of insurers working in the region could lead to the re-establishment of a state government-run insurance office, Mr Olsen told insuranceNEWS.com.au: “You can’t really blame the insurance companies, knowing what the reinsurance costs are going to be.”
 .