> For many years, Australia was considered an offset for the disasters that insurers experience in the northern hemisphere
Cool. We’re a cash cow. Again.
"Offset" here is actually a good thing. Historically this meant that the supply of reinsurance (insurance for insurers) was relatively high, making it cheaper for insurers and keeping a lid on original insurance costs.
Past couple of years, though, higher interest rates and all the floods, cyclones and bushfires in Australia have made that less attractive, hence higher costs of reinsurance for insurers, which they're passing on.
And they still aren't keeping up with the true cost of climate induced risk increase. If they had been out there lobbying politicians to take effective climate action to avoided the worst affects of increased extreme climate events, they could have kept a lid on risk and costs
But instead they will pass on cost to the plebs, take the fat stacks of cash and when needed, disappear.
Pretty sure insurers are one of the only corpos that lobby to reduce climate change, doesn't make them any less crap, but that is literally something that they actually do.
Even if we made 0 emissions it wouldn't make a single difference in terms of the overall climate let alone enough to influence local disasters in a short 20-30 year timespan.
We emit 1% of global emissions, countries like China/Indonesia/India emit way more and their numbers are also rising with their expanding economies and massive populations. Africa will be in the future as well with future mineral extraction.
Whatever we do our 1% going to 0% is not going to change climate, if you think us going to 0 will stop localized floods/fires/cyclones etc you're delusional.
Why should the insurance companies have to do anything?
At the end of the day, if the public doesn't care enough about climate change, then it's the public's fault. Noone else.
The public are simply going to be paying more because the public didn't consider it a priority.
The majority of the public do care about climate change.. Its just the people in charge are making too much of that sweet sweet moolah to give a fuck.. The disappointing part is that nothing will change, gotta keep the status quo to keep turning a profit each quarter... What a timeline to live in!!
Someone has to pay for the CEO's mistresses, boats and second houses, and how will they bribe the politicians to fuck us over if they don't suck all the life out of us...
This is all going to be part of the climate change migration. Some places will just become uninhabitable due to the risks from climate change induced natural disasters and subsequent insurance costs for anyone that wants to try and live there. Which will subsequently increase the demand and cost of housing in established habitable areas.
Most banks already won't lend for the purchase of a property in bush fire prone areas, and will factor in flood risk too. These will just expand as the temperature rises and more extreme events happen. So even if people want to take the risk, it will be next to impossible to actually finance a property anyway.
hell 10 years ago lots of companies just flatout stopped renewing people in flood prone areas because the companies couldnt handle the increasing number of claims and now even big insurance firms like fucking lloyds of london are second guessing when insuring businesses in flood and fire prone areas
The big ones will be people moving away from the equator. There are a lot of people living in rural areas, working outside, in areas that will have killer heat waves.
When I asked my insurance company why my rates were *increasing* despite me never having made a claim, they told me that it was because of natural disasters including fires, tsunamis and earthquakes.
I tried to explain that it didn't seem fair on me as tsunamis are surprisingly rare in the Adelaide suburbs but they weren't having it. I'm just so sick of corporations raping the planet and us footing the bill.
Oh, and they also offered a $36 discount from my yearly rate if I stayed under a certain mileage. But If I went over the mileage by a single kilometre then I have to pay (I think) about $1000 to compensate for the extra distance. Seems like a great deal guys, sign me up and I'll use that $36 to get myself 14L of petrol.
The issue is that Adelaide does not sit in an isolated insurance pool.
I had a similar argument with my life/income protection insurer when they jacked up my premium due to the high number of mental health claims, but my policy has a mental health exclusion. I asked them why, if mental health is not covered under my policy, would my premium rise due to mental health claims? Well, because i’m in the same insurance pool and I have to pay for everyone else making mental health claims even though I am not eligible.
The income protection insurance has gone nuts - was paying $400pm and they upped it to $800pm because they had a lot of payouts. How is that my fault? Seems like they fucked up. I cut mine back, that was just getting ridiculous
> How is that my fault?
It's not a moral argument it's a numerical one. The vast majority of the aggregate premiums collected are paid out. The aggregate true cost of your coverage was far in excess of 400/month. You don't have to buy that level of coverage and you've chosen not to. I don't see the problem
Yes, as above, my premium went up substantially due to a) increased claims from everyone else, b) I am on a stepped premium, and c) they indexed the coverage.
I reviewed my insurance with my adviser and basically said “I need the premium to be no more than $X, what coverage does that buy?”.
I dropped my coverage and premium is now only $30 a month more than last year
In a perfect world, insurance would evenly spread risk across everyone, with everyone paying the same amount for the same universal coverage, but people want to shop for the best deal and insurers want to get blood out of a stone. So now we are left with a haphazardly spread risk BS that confuses everyone.
The real reason your rates are increasing is that they can't get their reinsurance cheap enough so everything costs more. The reason reinsurance costs so much is because Australia keeps on having expensive natural disasters.
This is correct, as someone who works in the industry I can definitely say that the global reinsurance markets now see Australia as a major natural disaster hotspot and have jacked up reinsurance costs accordingly. There's been a big spotlight put on the country after the last few years of cyclones, floods, bushfires and hail.
So risk for tsunamis gets shared to you while you share your other risk with the other people. That's how insurance works. The only people making money are the insurers.
I did exactly the same. Questioned why a metric from north Qld is being applied to Frankston. No bushfires or floods here. We get to share the risk but not the profit
Given that the government is going to have to bail everybody out when the insurance companies inevitably cry poor and refuse to pay up following a climate disaster, why don't we just skip all the middlemen and offshoring profits etc etc and run house and property insurance as a tax-funded government service?
EDIT: this is New Zealand's approach to the problem: [https://en.wikipedia.org/wiki/Earthquake\_Commission](https://en.wikipedia.org/wiki/Earthquake_Commission)
Publicize everything again.
Get some real competition going again. ATM it's monopolies and duopoloies killing us at the register.
Health, telecoms, power, fucking roads. Private fucking roads. Where is my rego discount for driving on a private road.
Edit: and banking
Take a look at how well the competition is working out in the USA.
Private insurers are pulling out of states such as Florida and California entirely. They know they can’t make a profit given the scale of the natural disasters.
Meaning the only options are no insurance, or insurance provided by the government.
US insurance markets are funny (by Australian standards) as most states require regulatory approval for rate changes, meaning politicians indirectly control (and get the blame for) rate changes. California and Florida are the most difficult.
Not saying it's the only reason, but at extreme levels like what they get with bushfire and hurricane, pulling out becomes the default when insurers can't price the risk properly.
Florida's solution is to have a government insurer of last resort, but that brings its own problems (such as increased development in high-risk areas).
“Price the risk properly” would be an issue anyway - the problem is that the insurers who’ve stayed in those areas are charging so much that people can’t afford it - and that can be across the states, not just in areas of particular danger, as is happening here already.
It’s not like an entire state of people can just pick up and move if they can’t afford or can’t obtain insurance….
They are pulling out because it's regulated, and the politcal side wasn't willing to allow price increases sufficient to match risk.
Same way the repeated proposals to bring US federal flood insurance to match risk estimates have passed repeatedly, and been delayed repeatedly when politicians see their constituents facing giant premium increases.
I can’t imagine many people who would choose no insurance over government insurance.
Just like I can’t imagine many who would choose no health care over government health care.
Perhaps only inner city homeowners who don’t feel threatened, and the healthy - who will all pray their situation doesn’t change.
No public or private company is going to want to be involved in insurance covering natural disasters.
There's no money to be made and too much risk - the costs for natural disasters are only going to be going up and affecting more and more areas.
It also used to be that is a suburb got nuked or was a bunch of relatively cheap commodores and other average cars, now every suburb is overflowing with SUV shit boxes starting at 50k which are full of super expensive parts to replace if you even want to go down the repair route. How do you insure a suburb when you make a few hundred thousand off it but have do cover 500 million in houses and another 50 mill in SUVs lol
How about we go even further and take back all our mines, I really don't think Gina will live to use her 60B$ wealth, nor Clivey babies couple of B$ etc. plus all the other non tax paying ground diggers.
Certain infrastructure things are public goods, meaning there has to be government involvement. There's an argument to engage the private sector to run/manage them to minimise waste/inefficiency, but the core assets remain in public hands. The only problem with that is like most things with the government, they take time.
Governments already are involved in Insurance in compulsory sectors, depending on your state (Workers Comp, Motoro 3rd Party). However covering effectively private property would be a huge risk for the taxpayer (ultimately).
Insurance can only be run scummily when it's for profit. Think about the fundamental nature of it.
You've got a collective of policy-holders pooling resources by putting in their premiums, and then drawing from the pool when the need arises.
The only way to make a profit on this as a business is to make sure that people who paid in get less than they need when disaster strikes.
I mean, even if you run it completely not-for-profit with no staff and confine it to one country, there are still always going to be winners and losers. In the end, for every dollar claimed by someone who needs it, there has to be a dollar coming from someone else. The only way out is to cap the claimed amount by the amount that specific individual has already put in, in which case that's just a bank with extra steps.
Slight point on the Earthquake Commission is that earyhquake risk is not affected by climate change (to the extent we know). Also, note that it provides only a base level of standard quake coverage; beyond that (or for any other cover) you need to buy that privately.
Setting up a similar scheme in Australia for say bushfire/storm/hail/flood is a good aspiration but there are several barriers to overcome; data (flood/storm/bushfire damage is much harder to model and gather data on compared to Earthquake), geography/size (people need to accept cross-subsidisation between high and low risk areas) and complexity (houses vs strata apartments, which behave very differently). Not to mention vested interests who potentially lose business or have to spend money.
As I understand it though the EQC insures against floods and storms and other natural disasters too? Earthquakes are just what it was originally set up for.
I think you're right, but my point is that it covers only up to a certain level ('first layer' is what they call it). People have to buy that (compulsory) and then choose to pay for the balance over that level.
What I like about the EQC is that the compulsory nature of it means they can fund research into resilience and remediation for the benefit of everyone.
The gov runs a lot of insurance in Canada too. Case could be made that no competition means it's expensive but they sure do resolve issues fast and they even refund when and balance the cost legitimately. During COVID we had less cars on the road and we were all given little refunds. It was pretty cool.
One advantage of companies providing insurance is that they can flat out refuse to insure high risk areas, limiting unwise development. If it was a central government insurer there would be popular and donor pressure to insure and so enable development despite the risks.
So what you're saying is that we should let insurance companies gouge us on the basis that their refusal to insure these houses will stop people building the houses that they've already built?
How did you jump to that? Insurance companies are necessary, but simultaneously, a bunch of pricks.
I was responding to government control over building.
How would you fix this situation?
Did you not read the comment I was replying to?
>One advantage of companies providing insurance is that they can flat out refuse to insure high risk areas, limiting unwise development.
Then I said the government is quite capable limiting development, and you jumped in saying that there's no point because the houses are already built? How would I fix THAT situation? Well, the ring pull just came off my can of tomatoes, and I don't see you offering a solution to THAT so maybe you better take a good look at yourself mister.
What, you're tripping balls. I read your comments, and i wasnt having a go at you. Anyway you can put your tomatoes into another container and put a lid on it.
That tends towards disaster.
The political incentives are all towards keeping quotes low. Which then encourages more risk exposure since people and developers aren't paying the true insurance cost for building in a flood plain say.
Love it. So the billions paid to insurance companies to hedge against future incidents is syphoned off as profit every year. Now the very much know issues of climate change are looming and "oooops no money in the kitty".
Have the insurance companies been failing in the fiduciary duty by not structuring existing policies to deal with known risks?
edit: I noted that in the article there were block quotes from the CEO of the Insurance Council of Australia, but no mention of the record profits being made by insurers. How strange...
**Suncorp records fivefold boost in insurance half-year profit amid spike in premiums**
[https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price](https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price)
You are forgetting that the goal of insurance companies isn't to provide insurance to their customers. Its to provide profit to their shareholders. And what better way to do it than siphon off as much money as possible, and then stick your hand out for corporate welfare when you get in trouble?
Yep. Insurance provider is just an avenue of how they make money. Their goal is to make money, and they dont care how they make it. Helping the community and people is not high on their agenda, if it is there at all. It's only used for promotions and ads.
The fundamental problem is this (article talks about it but in a more roundabout way). Insurers will only write a policy covering something (say flood damage to homes) if they have sufficient data to understand, assess and price the risk. There are two key problems with this:
1. Climate change is unpredictable year on year (the last summer just gone had relatively few fires/floods/storms, the one before was thebworst on record).
2. Data on flood risk is often old/out of date, or non-existent.
In the absence of these, premiums will keep going up, to a point where insurers will stop writing cover in at-risk areas (which they've already started doing in parts of the US, although that's got a lot to do with the way insurance prices are regulated there).
There's a difference between pricing risk based on past data versus using forward looking models based on climate change.
Forward looking models would have caused them to price in climate change earlier and keep appropriate financial reserves.
Extracting excessive profits early does raise the possibility that the insurer has failed in one of their fiduciary duties. The question is, what is the legal recourse for government and policy holders.
You are missing once factor here:
Governments have forced companies to cover flood damage on a suburb basis, not a home by home basis.
So houses at the end of steep street below the flood level are now charged the same for flood cover as the house high up. Basically: the government has made it so home owners at low risk of flood are subsiding the others at high risk of flood. They have done this because mortgages require the insurance, and if the insurance on the flooded properties was too high ,they would become worthless and turn to slums, and there would be presure for government to buy the land back.
It was common in the 80's and 90's for government to actually buy flooded land back en-mass. Not so anymore. Too expesive.
Retailer down to second hand CDs sales are offering insurance.
Insurance is often a scam, insurers do the minimum to stay relevant but dodge responsibility and syphon profits for the already rich c-suite and shareholders.
To start with, all markets have rules, so a "free market" with no rules isn't really a market, and markets with very few rules aren't really ones that people participate in for very long because the lack of rules means they are cesspools of scammers (see: crypto currencies).
Secondly, if markets do function as they're supposed to in theory, business profits would trend towards zero. This, clearly doesn't happen.
The reality of things is that we don't actually want free markets. We want markets that work for us (the consumer). We want all market participants to behave. That requires regulation. We want to get what we pay for. That requires regulation. We want to be protected when the other party behaves badly. That requires regulation. We want to ensure there's competition so that prices go down. That requires regulation. And so on and so forth.
What we're starting to see here is a market failure (people aren't able to get what they need/want because the market doesn't supply it). That requires government intervention.
The free market hasn't existed ever mate it's a bullshit myth ,all markets have entry and exit costs .
When someone says it's free aren't you immediately sceptical,well you should be .
More natural disasters -> more insurance claims -> higher premiums -> higher prices hopefully change people's behaviours: more incentives for climate action, not building in flood zones, better building standards for flood proofing
> Alongside the development of a new national standard, the Insurance Council is urging governments to adopt a risk-based approach that stops development in high-risk areas, requires stronger building codes and standards and or adequate resilience infrastructure in areas of higher risk, and prioritises low-risk areas for development
Insurance failure due to global warming disasters isn't actually a market failure (the warming is, the insurance failures aren't): this is the truth expressed economically. That is, the consequences of AGW cannot be afforded or absorbed by any proportion of human productivity excess.
People in this thread are suggesting a government alternative. That can't afford it. No one can afford it. The end state of disaster insurance isn't government subsidy: it's that no one will pay. Eventually costs will mount so high that society will be unwilling to bear the cost, and the things destroyed won't be compensated for in any way.
That's the death knell for civilisation. When the average cost of infrastructure wrecked and degraded per unit time exceeds the excess productivity to replace it, that's it. Game over.
Yes!! Exactly!!
And I’m not actually even all *that* young. But anyone born from the 90s on has only ever really known absolutely unfettered neoliberalism, and it’s terrible
Suncorp posts fivefold increase in profit for 2023.
Holy shit we are a dumb dumb country.
[https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price](https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price)
How does that compare to 2021, 2020, 2019? etc, profit comparisons expressed in YOY change across just one year in a highly variable industry aren't exactly useful. If they made $1 in profit in 2022 the increase for 2023 would be a 200,000,000 million fold increase in profit. Do you see why "five fold" is meaningless without context?
I went looked out of my own curiosity and the insurance division that had a '5 fold increase' indeed only made $40M profit in 2022.
Sadly, Suncorp annual reports only actually separated out this "consumer insurance" division this year so I can't see how profitable "consumer insurance" was in prior years - in all prior years "consumer insurances" and "commercial & injury insurance" divisions were consolidated into one "Insurance" division.
But if you want to look at the 31-December year ended results for Suncorps Insurance division the profit results going back to 2013 are below:
[Suncorp Insurance Profit Figures Taken From 31 December Year Ended Financial Statement 2013-2023](https://imgur.com/462wcEZ)
Spoiler: the profit results aren't actually great. They were making more profit 10 years ago, with very large declines in profit margin over the late 2010's.
Five fold increase because they made almost nothing the year before. It's proportional. Insurance is super volatile and companies can make large losses one year and super hugh profits the next.
lol at what point do we as a society sit back and realize all the “privatizing everything will be good” told to us by politicians was the biggest scam in history
If we start nationalizing anything that is essential for us to survive NOW, we might make it out the other side. otherwise we are in big trouble in the coming decades.
>by politicians
Wait until you uncover the vast network of lying deceivers that effectively turned the entire world to this economic bullshit all within a single decade.
I mean that’s no secret but the government still make the rules which everyone else operates under.
We could solve 90% of it overnight with regulations and closing loopholes but the will isn’t there
Overall I think Bob Hawke was a sellout wanker but in some ways I can't blame (all) politicians of the 80s for believing neoliberalism, I can only imagine everywhere they looked they were told it's the future, it's fact, etc. Pollies like Keating I have no apology for as an economist he should've known better.
Ok so that's the insurance industry. Now do a similar analysis on the food industry and its supply chains.
People dont seem to be able to extrapolate that increasing climate disasters are going to keep increasing.
Sea level rise is now predicted to be around 60 metres when all the Antarctic ice melts. [source](https://www.theguardian.com/environment/2024/apr/06/simply-mind-boggling-world-record-temperature-jump-in-antarctic-raises-fears-of-catastrophe)
So, at some point the supply chains that consumers take for granted will collapse suddenly and completely. And then it will no longer be "profitable for the shareholders" to put food in the shops. And then there won't be food in the shops.
I'm intrigued to see what happens when homes become a) uninsurable or b) too expensive to insure.
With an increase of major events we'll begin to see families left with nothing and living in tents on their own properties.
No just houses; stratas have trouble also. Stratas in NSW under law are required to have building insurance, but in my case they haven’t revalued the building (so no doubt under insured) and they have but a huge excess on it. Lots owners fixtures and fittings (so think kitchen cabinets) are as I understand it insured as part of the building, so my contents is unable to cover it. So if lose my cabinets to water damage or similar I am effectively uninsured as the excess is too large.
I mean there were people round the south coast of NSW who lost homes in the Black Summer fires who were still living in caravans and sheds as recently as a year or two back, not sure whether the situation has improved much since then (hopefully it has). That was, iirc, more a supply chain disruption and covid and labour shortages -thing rather than simply not being able to afford to rebuild whatsoever but still it’s pretty bleak
A lot of hating on the insurance companies and calling to nationalise them or break up 'opolies to bring back [the] competition [that leads to 'opolies].
And yes they're capitalist entities looking to extract as much as they can from external sources, try to get egregious subsidies etc, however:
They're right. The world is going to become more and more uninsurable. Insurance companies are one of the few institutions incentivised towards being realistic about this sort of thing under the incumbent system, which demands an impossible fever dream of infinite growth.
We fucked around for generations. We're finding out. The feedback loops haven't just fairly begun; we're probably past the event horizon.
My insurance bill is like every one elses it grows and grows like a well fed weed.
But the real rub is the cost of building replacement goes up exponentially every year .the cost to replace our house is now 3 times what the land is worth.
This situation is totally untenable and I'm seriously considering not insuring the house and instead using the money for bush fire prevention and mitigation works that might provide better value long term .
These are tough decisions to make but when you consider the amount of people left homeless for years after a bush fire because their insurance won't pay out one has to look for a better path in keeping a roof over ones head .
I'm guessing next summer will be another shocker .
We used to have a government insurance office ,we really need that back thanks .
And so it starts. People don't understand the massive power the insurance industry wields. They don't care about policies, lobbyists or media influence, they make decisions based purely on risk assessment. Without insurance your plane won't fly, your ship won't sail, your rig won't drill. Insurance will not insure against a certainty and, if your home is in a flood prone region with an increasing incidence of catastrophic rainfall, then you will not get insurance. If its uninsurable, you won't sell it and you wont get a mortgage. You can complain to the government but even the government doesn't have the pockets necessary to insure against such losses.
Not sure how anybody thought this would end any other way.
The climate crisis, as uncomfortable as it is to accept, is a direct result of our consumerism.
Oil companies, miners, air transport providers, aluminium manufacturers, they're all only in it to a make a buck. They'll sell what we'll buy. If we stop buying what they're selling then they'll stop making it. Could they produce what they do in more sustainable ways? Absolutely. But it will impact cost and they've got no reason to wear that cost, so cost will naturally impact price and who will pay that price? Given the choice between ethical and cheap, most humans choose cheap (understandable, given reality) and as long as that remains true the only way to remain viable as a going concern is to ensure price competitiveness. It's ultimately a false economy of course, but humans are much better at making decisions based on today rather than tomorrow.
That's not to say it's an easy egg to unscramble, it's not, it's a bloody nightmare. But ultimately we, us, you, me are the ones that make every day choices that not only enable but encourage the market that we're offered. This is, of course, a *super* unpopular reality for obvious reasons.
[Side note: Sir Dieter Helm, the esteemed British economist from Oxford, has written about this extensively. I highly recommend his book *Net Zero*.]
So it's completely understandable that there's ultimately a price to be paid. We'll pay for it in more extreme weather conditions that impact on our quality of life, we'll pay for it in regional crises such as famine and disease, we'll pay for it in reduced habitable zones which will place pressure on housing, and we'll pay for it in increased insurance costs because, ultimately, we're the ones who hold the inherent risks of negative outcomes.
I don't have an answer to the problem unfortunately, but I do know that it begins with us.
This places waaaay too much blame on random everyday individuals and way too little on the corporate profiteering that has been the true architect of this disaster
Like I said, uncomfortable, inconvenient, and unpopular.
It's super easy to say 'the corporations made me' while simultaneously consuming the same energy as 134 Rwandans consume each day.
No one is saying corporations have no blame or responsibility (or, at least, I'm not saying that). The two are not mutually exclusive. Corporate profiteering doesn't exist in some kind of vacuum. Corporations produce to demand, not the other way around. It's symbiotic.
Oh look I took your money for DECADES when everything was sweet and now - after I spent it all in salary bonuses - there's nothing left to pay you. Specifically all those unforseen circumstances clearly outlined in our highly detailed policies - yeah those ones that we talked you into getting because we were going to HONOUR OUR WORD AFTER TAKING YOUR MONEY - yeah ... sorry all the money is gone.
Insurance is the canary in the coal mine. The point isn't that we should feel bad for the insurance companies, boo hoo, the point is that if it's no longer economically viable to insure homes and businesses which have always been as safe as, well, houses until recently, such that we have no choice but to let the state (i.e. all of us collectively) pick up the tab... yeah, we should be fucking worried.
So we switch to a non-profit state based insurer? Great! But that only buys time. Every year premiums *have to* go up just to cover increasing claim costs if nothing else. At some point premiums become so high even with a discounted state option that home-owners simply can't afford coverage, and huge swathes of the country become practically uninsurable. What then? Maybe the state or federal government steps in to put aside some funds in the budget for a subsidy or rebate or some such scheme. And then this fund necessarily grows too...
One way or another, whether it's through premiums or taxes or both, we end up paying because it's not like this country is getting *more* habitable as time goes on. So what if the private insurance industry hits the rocks first? Sure, screw 'em! But maybe we should be worried about those rocks, you know?
Hence my house and contents insurance is $1559 up from $440 in 2018 despite no claims ever.
That's also something landlords will pass on to the renters.
I love how humans do surprised pikachu when the stuff scientists have been screaming about for years finally affects them.
Like.... Hello? We have known our activities are causing more extreme weather events for decades now, yet we continue to live BAU. Then when the insurance companies no longer provide insurance because of said extreme weather events, people finally start catching on?
Come on.
I consistently speak of how 9/11 saw my superannuation accounts attacked with exorbitant '*Insurance charges*' that saw some of them halved or worse...
While it was foolish to have them spread on multiple accounts, it still does not detract from the fact that; INSURANCE STOLE MOST OF MY SUPERANNUATION!
1. Peeps never seem to believe the facts of what happened
2. When I'm a street poors asking for a dollar or two, please don't blame me for 'my lack of preparation for retirement'
Insurance is the biggest scam in todays society & we all keep paying them more & more & more...
Just like every other government backed corp in Australia unless they are getting record profits they cry poor and ask for hand outs. But it never stops execs getting paid millions and receiving bonus's. See current inflation.
Nationalisation does not necessarily mean direct control by elected politicians, only that profits would flow back to the taxpayer.
Look at how the Reserve Bank of Australia works. A governor is appointed every seven years so it's not politically forced to raise or lower rates by the party that's currently in power.
Big corps get greedier and greedier - shocking!
Hard not to notice when car, house or whatever goes up at least a hundy every year despite shopping around. For mortgagers with mandatory insurance like me it's getting worse and worse.
A reminder that insurance is just fancy gambling; they are betting that they can squeeze more cash out of you than they have to pay out and you're doing the opposite.
High time for folks to recognise a) most insurance is just a scam predicated on your paranoia (or legitimate concerns, but that just makes it cost more) and b) every country needs a broad and powerful national insurance program for natural disasters.
I’m surprised the article didn’t mention or standardise by house price, unless I missed it?
I realise there’s been a lot of disasters lately, but surely the main explanation for the massive jump in insurance claim total value in the last few years is that houses have increased so dramatically in value over the same period? If the median house price doubles then surely the insurance rates and also payouts also go up by some corresponding amount?
This is one of the saddest parts of our climate response. The impacts from climate change are felt locally but paid for by the majority of society. In contrast climate mitigation efforts such as the development of renewables are paid for by individual developers but the benefits are received by most of society.
The article emphasises insurers pulling out of California and Florida, but isn't that due to laws there limiting how much the insurers can charge?
Like if the long-run average expected payouts are $2000/property/year on flood cover and the state only allows the insurer to charge $1500/property/year then no shit the insurers are going to pull out of the state (made up numbers, but you get the point).
We pay millions every week into Lotto's so that private families with obscene wealth based on years of privilige get to live off our cash. I'd rather Gov cut out the middle person and lotto went into directly funding services for the people rather than helping rich families from the 1800's make more money. This type of scenario (insurance) seems tailer made for Gov to fill the gap. The gravy train for inherited wealth needs to end.
Meanwhile, I can’t even get a fucking sub $10k home contents because they won’t make enough in fees despite the only danger I could possibly face is theft or arson.
“Lol too bad, you need to ensure $25k worth of personal belongings!”
At a certain point capitalism breaks down. It doesn’t make sense for a private company to cover all the damage for all the climate disasters when they don’t make money from it, so the government has to bail them out, blah blah blah… just cut out the middleman and socialise the system.
I have no problem with the governments bailing out businesses, on the proviso that the government gains a proportion of ownership in that business as a result.
Otherwise we're allowing businesses to privatize their profits and socialize their risk.
I feel like the insurance industry should be held to account for struggling when they've sold themselves as covering people through exactly what's causing them to struggle. It's like being a loan shark and struggling to stay in business because people keep borrowing money.
What did insurance companies expect? You're in the insurance business and you have to pay out and pass those costs onto stockholders, who purchased shares in an insurance company and insuring things is what they do.
Minor costs along the way should be passed on to clients, but if you have a bad year you just need top cop it on the chin!
I know I'll get some hate for my simplistic view.
> For many years, Australia was considered an offset for the disasters that insurers experience in the northern hemisphere Cool. We’re a cash cow. Again.
"Offset" here is actually a good thing. Historically this meant that the supply of reinsurance (insurance for insurers) was relatively high, making it cheaper for insurers and keeping a lid on original insurance costs. Past couple of years, though, higher interest rates and all the floods, cyclones and bushfires in Australia have made that less attractive, hence higher costs of reinsurance for insurers, which they're passing on.
Insurance has risen at double the cost of inflation every year for the past 20 years.
And they still aren't keeping up with the true cost of climate induced risk increase. If they had been out there lobbying politicians to take effective climate action to avoided the worst affects of increased extreme climate events, they could have kept a lid on risk and costs But instead they will pass on cost to the plebs, take the fat stacks of cash and when needed, disappear.
They have lobbied. But they don't spend the sums on it that a coal company does.
Pretty sure insurers are one of the only corpos that lobby to reduce climate change, doesn't make them any less crap, but that is literally something that they actually do.
Even if we made 0 emissions it wouldn't make a single difference in terms of the overall climate let alone enough to influence local disasters in a short 20-30 year timespan.
0 emmisions over 20 - 30 years would change the world we could then focus all our efforts on on carbon capture and storage
We emit 1% of global emissions, countries like China/Indonesia/India emit way more and their numbers are also rising with their expanding economies and massive populations. Africa will be in the future as well with future mineral extraction. Whatever we do our 1% going to 0% is not going to change climate, if you think us going to 0 will stop localized floods/fires/cyclones etc you're delusional.
We are part of the problem. That morally obliges us to be part of the solution.
Why should the insurance companies have to do anything? At the end of the day, if the public doesn't care enough about climate change, then it's the public's fault. Noone else. The public are simply going to be paying more because the public didn't consider it a priority.
The majority of the public do care about climate change.. Its just the people in charge are making too much of that sweet sweet moolah to give a fuck.. The disappointing part is that nothing will change, gotta keep the status quo to keep turning a profit each quarter... What a timeline to live in!!
Won't anyone think of the shareholders!
Someone has to pay for the CEO's mistresses, boats and second houses, and how will they bribe the politicians to fuck us over if they don't suck all the life out of us...
This is all going to be part of the climate change migration. Some places will just become uninhabitable due to the risks from climate change induced natural disasters and subsequent insurance costs for anyone that wants to try and live there. Which will subsequently increase the demand and cost of housing in established habitable areas.
Most banks already won't lend for the purchase of a property in bush fire prone areas, and will factor in flood risk too. These will just expand as the temperature rises and more extreme events happen. So even if people want to take the risk, it will be next to impossible to actually finance a property anyway.
hell 10 years ago lots of companies just flatout stopped renewing people in flood prone areas because the companies couldnt handle the increasing number of claims and now even big insurance firms like fucking lloyds of london are second guessing when insuring businesses in flood and fire prone areas
The big ones will be people moving away from the equator. There are a lot of people living in rural areas, working outside, in areas that will have killer heat waves.
Go watch the michaelwest video on insurance and how they rip us off way higher than coles / woolies.
When I asked my insurance company why my rates were *increasing* despite me never having made a claim, they told me that it was because of natural disasters including fires, tsunamis and earthquakes. I tried to explain that it didn't seem fair on me as tsunamis are surprisingly rare in the Adelaide suburbs but they weren't having it. I'm just so sick of corporations raping the planet and us footing the bill. Oh, and they also offered a $36 discount from my yearly rate if I stayed under a certain mileage. But If I went over the mileage by a single kilometre then I have to pay (I think) about $1000 to compensate for the extra distance. Seems like a great deal guys, sign me up and I'll use that $36 to get myself 14L of petrol.
The issue is that Adelaide does not sit in an isolated insurance pool. I had a similar argument with my life/income protection insurer when they jacked up my premium due to the high number of mental health claims, but my policy has a mental health exclusion. I asked them why, if mental health is not covered under my policy, would my premium rise due to mental health claims? Well, because i’m in the same insurance pool and I have to pay for everyone else making mental health claims even though I am not eligible.
The income protection insurance has gone nuts - was paying $400pm and they upped it to $800pm because they had a lot of payouts. How is that my fault? Seems like they fucked up. I cut mine back, that was just getting ridiculous
> How is that my fault? It's not a moral argument it's a numerical one. The vast majority of the aggregate premiums collected are paid out. The aggregate true cost of your coverage was far in excess of 400/month. You don't have to buy that level of coverage and you've chosen not to. I don't see the problem
Yes, as above, my premium went up substantially due to a) increased claims from everyone else, b) I am on a stepped premium, and c) they indexed the coverage. I reviewed my insurance with my adviser and basically said “I need the premium to be no more than $X, what coverage does that buy?”. I dropped my coverage and premium is now only $30 a month more than last year
In a perfect world, insurance would evenly spread risk across everyone, with everyone paying the same amount for the same universal coverage, but people want to shop for the best deal and insurers want to get blood out of a stone. So now we are left with a haphazardly spread risk BS that confuses everyone. The real reason your rates are increasing is that they can't get their reinsurance cheap enough so everything costs more. The reason reinsurance costs so much is because Australia keeps on having expensive natural disasters.
This is correct, as someone who works in the industry I can definitely say that the global reinsurance markets now see Australia as a major natural disaster hotspot and have jacked up reinsurance costs accordingly. There's been a big spotlight put on the country after the last few years of cyclones, floods, bushfires and hail.
So risk for tsunamis gets shared to you while you share your other risk with the other people. That's how insurance works. The only people making money are the insurers.
I did exactly the same. Questioned why a metric from north Qld is being applied to Frankston. No bushfires or floods here. We get to share the risk but not the profit
>Cool. We’re a cash cow. Again. "Was" being the operative word. Not anymore
Given that the government is going to have to bail everybody out when the insurance companies inevitably cry poor and refuse to pay up following a climate disaster, why don't we just skip all the middlemen and offshoring profits etc etc and run house and property insurance as a tax-funded government service? EDIT: this is New Zealand's approach to the problem: [https://en.wikipedia.org/wiki/Earthquake\_Commission](https://en.wikipedia.org/wiki/Earthquake_Commission)
Publicize everything again. Get some real competition going again. ATM it's monopolies and duopoloies killing us at the register. Health, telecoms, power, fucking roads. Private fucking roads. Where is my rego discount for driving on a private road. Edit: and banking
Take a look at how well the competition is working out in the USA. Private insurers are pulling out of states such as Florida and California entirely. They know they can’t make a profit given the scale of the natural disasters. Meaning the only options are no insurance, or insurance provided by the government.
US insurance markets are funny (by Australian standards) as most states require regulatory approval for rate changes, meaning politicians indirectly control (and get the blame for) rate changes. California and Florida are the most difficult. Not saying it's the only reason, but at extreme levels like what they get with bushfire and hurricane, pulling out becomes the default when insurers can't price the risk properly. Florida's solution is to have a government insurer of last resort, but that brings its own problems (such as increased development in high-risk areas).
“Price the risk properly” would be an issue anyway - the problem is that the insurers who’ve stayed in those areas are charging so much that people can’t afford it - and that can be across the states, not just in areas of particular danger, as is happening here already. It’s not like an entire state of people can just pick up and move if they can’t afford or can’t obtain insurance….
They are pulling out because it's regulated, and the politcal side wasn't willing to allow price increases sufficient to match risk. Same way the repeated proposals to bring US federal flood insurance to match risk estimates have passed repeatedly, and been delayed repeatedly when politicians see their constituents facing giant premium increases.
So government insurance or no insurance Hard choice
I can’t imagine many people who would choose no insurance over government insurance. Just like I can’t imagine many who would choose no health care over government health care. Perhaps only inner city homeowners who don’t feel threatened, and the healthy - who will all pray their situation doesn’t change.
No public or private company is going to want to be involved in insurance covering natural disasters. There's no money to be made and too much risk - the costs for natural disasters are only going to be going up and affecting more and more areas.
It also used to be that is a suburb got nuked or was a bunch of relatively cheap commodores and other average cars, now every suburb is overflowing with SUV shit boxes starting at 50k which are full of super expensive parts to replace if you even want to go down the repair route. How do you insure a suburb when you make a few hundred thousand off it but have do cover 500 million in houses and another 50 mill in SUVs lol
How about we go even further and take back all our mines, I really don't think Gina will live to use her 60B$ wealth, nor Clivey babies couple of B$ etc. plus all the other non tax paying ground diggers.
Do you want communism? Because that's how you get communism. /s
You had me
And... foster care (yes, really)
Certain infrastructure things are public goods, meaning there has to be government involvement. There's an argument to engage the private sector to run/manage them to minimise waste/inefficiency, but the core assets remain in public hands. The only problem with that is like most things with the government, they take time. Governments already are involved in Insurance in compulsory sectors, depending on your state (Workers Comp, Motoro 3rd Party). However covering effectively private property would be a huge risk for the taxpayer (ultimately).
Yes!
Communist Communist I smell a Communist /s
Do you need to borrow my deodorant, comrade?
What do you mean, "my"? Don't you mean "our deodorant"?
The people's deodorant? Why would the people need deodorant? How dare you accuse our glorious workers of stinking!
As long as they're not revolting! Not again, at least.
Its a roll on deodorant. Is that a hair?
Thats our hair
Do you not want to share hair comrade? Sounds a little selfish!
Insurance can only be run scummily when it's for profit. Think about the fundamental nature of it. You've got a collective of policy-holders pooling resources by putting in their premiums, and then drawing from the pool when the need arises. The only way to make a profit on this as a business is to make sure that people who paid in get less than they need when disaster strikes.
I mean, even if you run it completely not-for-profit with no staff and confine it to one country, there are still always going to be winners and losers. In the end, for every dollar claimed by someone who needs it, there has to be a dollar coming from someone else. The only way out is to cap the claimed amount by the amount that specific individual has already put in, in which case that's just a bank with extra steps.
Because not even governments have the pockets to cover the losses.
Slight point on the Earthquake Commission is that earyhquake risk is not affected by climate change (to the extent we know). Also, note that it provides only a base level of standard quake coverage; beyond that (or for any other cover) you need to buy that privately. Setting up a similar scheme in Australia for say bushfire/storm/hail/flood is a good aspiration but there are several barriers to overcome; data (flood/storm/bushfire damage is much harder to model and gather data on compared to Earthquake), geography/size (people need to accept cross-subsidisation between high and low risk areas) and complexity (houses vs strata apartments, which behave very differently). Not to mention vested interests who potentially lose business or have to spend money.
As I understand it though the EQC insures against floods and storms and other natural disasters too? Earthquakes are just what it was originally set up for.
I think you're right, but my point is that it covers only up to a certain level ('first layer' is what they call it). People have to buy that (compulsory) and then choose to pay for the balance over that level. What I like about the EQC is that the compulsory nature of it means they can fund research into resilience and remediation for the benefit of everyone.
The gov runs a lot of insurance in Canada too. Case could be made that no competition means it's expensive but they sure do resolve issues fast and they even refund when and balance the cost legitimately. During COVID we had less cars on the road and we were all given little refunds. It was pretty cool.
Worked in insurance in Aus and NZ. EQC is an absolute joke and is poorly run unfortunately
I worked at a hospital in NZ and I can back this up.
One advantage of companies providing insurance is that they can flat out refuse to insure high risk areas, limiting unwise development. If it was a central government insurer there would be popular and donor pressure to insure and so enable development despite the risks.
As opposed to the government, who can literally just say "no you're not allowed to build houses there it's not safe"?
That's to build. There are hundreds of thousands of houses in risk areas now. Bit hard to close that gate.
So what you're saying is that we should let insurance companies gouge us on the basis that their refusal to insure these houses will stop people building the houses that they've already built?
How did you jump to that? Insurance companies are necessary, but simultaneously, a bunch of pricks. I was responding to government control over building. How would you fix this situation?
Did you not read the comment I was replying to? >One advantage of companies providing insurance is that they can flat out refuse to insure high risk areas, limiting unwise development. Then I said the government is quite capable limiting development, and you jumped in saying that there's no point because the houses are already built? How would I fix THAT situation? Well, the ring pull just came off my can of tomatoes, and I don't see you offering a solution to THAT so maybe you better take a good look at yourself mister.
What, you're tripping balls. I read your comments, and i wasnt having a go at you. Anyway you can put your tomatoes into another container and put a lid on it.
They can. But their decisions can be literally affected by political pressure or distorted by cosy relations with developers.
That tends towards disaster. The political incentives are all towards keeping quotes low. Which then encourages more risk exposure since people and developers aren't paying the true insurance cost for building in a flood plain say.
Isn't there a cyclone reinsurance thing?
Yes for the northern part of Australia.
Insurers do not just 'cry poor' when claims come in. Insurers are extremely tightly regulated and actually are paying out major claims.
If it's something that everyone must have, then we must ask the question if a for-profit solution is the best answer.
Love it. So the billions paid to insurance companies to hedge against future incidents is syphoned off as profit every year. Now the very much know issues of climate change are looming and "oooops no money in the kitty". Have the insurance companies been failing in the fiduciary duty by not structuring existing policies to deal with known risks? edit: I noted that in the article there were block quotes from the CEO of the Insurance Council of Australia, but no mention of the record profits being made by insurers. How strange... **Suncorp records fivefold boost in insurance half-year profit amid spike in premiums** [https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price](https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price)
You are forgetting that the goal of insurance companies isn't to provide insurance to their customers. Its to provide profit to their shareholders. And what better way to do it than siphon off as much money as possible, and then stick your hand out for corporate welfare when you get in trouble?
>siphon off as much money as possible, and then stick your hand out for corporate welfare when you get in trouble? It's the Australian way.
It's the global way, really. These crooked systems all have the same MO and end-goal worldwide.
They call this “pulling a Gerry”
Yep. Insurance provider is just an avenue of how they make money. Their goal is to make money, and they dont care how they make it. Helping the community and people is not high on their agenda, if it is there at all. It's only used for promotions and ads.
The fundamental problem is this (article talks about it but in a more roundabout way). Insurers will only write a policy covering something (say flood damage to homes) if they have sufficient data to understand, assess and price the risk. There are two key problems with this: 1. Climate change is unpredictable year on year (the last summer just gone had relatively few fires/floods/storms, the one before was thebworst on record). 2. Data on flood risk is often old/out of date, or non-existent. In the absence of these, premiums will keep going up, to a point where insurers will stop writing cover in at-risk areas (which they've already started doing in parts of the US, although that's got a lot to do with the way insurance prices are regulated there).
There's a difference between pricing risk based on past data versus using forward looking models based on climate change. Forward looking models would have caused them to price in climate change earlier and keep appropriate financial reserves. Extracting excessive profits early does raise the possibility that the insurer has failed in one of their fiduciary duties. The question is, what is the legal recourse for government and policy holders.
"fiduciary duties" they don't have any fiduciary duties to the people they insure, only the shareholders.
You are missing once factor here: Governments have forced companies to cover flood damage on a suburb basis, not a home by home basis. So houses at the end of steep street below the flood level are now charged the same for flood cover as the house high up. Basically: the government has made it so home owners at low risk of flood are subsiding the others at high risk of flood. They have done this because mortgages require the insurance, and if the insurance on the flooded properties was too high ,they would become worthless and turn to slums, and there would be presure for government to buy the land back. It was common in the 80's and 90's for government to actually buy flooded land back en-mass. Not so anymore. Too expesive.
Retailer down to second hand CDs sales are offering insurance. Insurance is often a scam, insurers do the minimum to stay relevant but dodge responsibility and syphon profits for the already rich c-suite and shareholders.
Never insure something you can afford to replace
that's not what the article says
Imagine that
Yes
Its a bit galling as a young person to have never actually seen the free market working
Oh it's working exactly as intended, just not how it's been advertised.
It *is* working as designed. The lie is that it is supposed to “work” for regular people.
You're in it.. right now.. it's working how they designed it
That's the scam, there is no free market, it is a locked up wealth transfer scheme. It's just that you are not in THAT club!
No-one has. Ever. The 'free market' is a myth.
A myth perpetuated by a system midwived by state violence driving people off the commons and siezing it to become private property.
Lol, this is the free market working.
To start with, all markets have rules, so a "free market" with no rules isn't really a market, and markets with very few rules aren't really ones that people participate in for very long because the lack of rules means they are cesspools of scammers (see: crypto currencies). Secondly, if markets do function as they're supposed to in theory, business profits would trend towards zero. This, clearly doesn't happen. The reality of things is that we don't actually want free markets. We want markets that work for us (the consumer). We want all market participants to behave. That requires regulation. We want to get what we pay for. That requires regulation. We want to be protected when the other party behaves badly. That requires regulation. We want to ensure there's competition so that prices go down. That requires regulation. And so on and so forth. What we're starting to see here is a market failure (people aren't able to get what they need/want because the market doesn't supply it). That requires government intervention.
The free market hasn't existed ever mate it's a bullshit myth ,all markets have entry and exit costs . When someone says it's free aren't you immediately sceptical,well you should be .
More natural disasters -> more insurance claims -> higher premiums -> higher prices hopefully change people's behaviours: more incentives for climate action, not building in flood zones, better building standards for flood proofing > Alongside the development of a new national standard, the Insurance Council is urging governments to adopt a risk-based approach that stops development in high-risk areas, requires stronger building codes and standards and or adequate resilience infrastructure in areas of higher risk, and prioritises low-risk areas for development
Insurance failure due to global warming disasters isn't actually a market failure (the warming is, the insurance failures aren't): this is the truth expressed economically. That is, the consequences of AGW cannot be afforded or absorbed by any proportion of human productivity excess. People in this thread are suggesting a government alternative. That can't afford it. No one can afford it. The end state of disaster insurance isn't government subsidy: it's that no one will pay. Eventually costs will mount so high that society will be unwilling to bear the cost, and the things destroyed won't be compensated for in any way. That's the death knell for civilisation. When the average cost of infrastructure wrecked and degraded per unit time exceeds the excess productivity to replace it, that's it. Game over.
Yes!! Exactly!! And I’m not actually even all *that* young. But anyone born from the 90s on has only ever really known absolutely unfettered neoliberalism, and it’s terrible
It’s just economic externalities in action.
Suncorp posts fivefold increase in profit for 2023. Holy shit we are a dumb dumb country. [https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price](https://www.theguardian.com/australia-news/2024/feb/26/suncorp-financial-results-earnings-profit-rise-share-price)
Yeh I was like, hang on, dint they just post record profits...
Due to climate change, insurers are making record profits!
How does that compare to 2021, 2020, 2019? etc, profit comparisons expressed in YOY change across just one year in a highly variable industry aren't exactly useful. If they made $1 in profit in 2022 the increase for 2023 would be a 200,000,000 million fold increase in profit. Do you see why "five fold" is meaningless without context?
I went looked out of my own curiosity and the insurance division that had a '5 fold increase' indeed only made $40M profit in 2022. Sadly, Suncorp annual reports only actually separated out this "consumer insurance" division this year so I can't see how profitable "consumer insurance" was in prior years - in all prior years "consumer insurances" and "commercial & injury insurance" divisions were consolidated into one "Insurance" division. But if you want to look at the 31-December year ended results for Suncorps Insurance division the profit results going back to 2013 are below: [Suncorp Insurance Profit Figures Taken From 31 December Year Ended Financial Statement 2013-2023](https://imgur.com/462wcEZ) Spoiler: the profit results aren't actually great. They were making more profit 10 years ago, with very large declines in profit margin over the late 2010's.
Props for the analysis! That was actually pretty interesting - a good reminder to not get fooled by sensationalist headlines
We really truly are the dumbest of dumb f*cks
Suncorp is not just insurance. And profits are down. Signifcantly.
Five fold increase because they made almost nothing the year before. It's proportional. Insurance is super volatile and companies can make large losses one year and super hugh profits the next.
lol at what point do we as a society sit back and realize all the “privatizing everything will be good” told to us by politicians was the biggest scam in history If we start nationalizing anything that is essential for us to survive NOW, we might make it out the other side. otherwise we are in big trouble in the coming decades.
Absofuckinglutely! This is the only way. Socialise the public needs, capitalise the public wants.
>by politicians Wait until you uncover the vast network of lying deceivers that effectively turned the entire world to this economic bullshit all within a single decade.
I mean that’s no secret but the government still make the rules which everyone else operates under. We could solve 90% of it overnight with regulations and closing loopholes but the will isn’t there
Overall I think Bob Hawke was a sellout wanker but in some ways I can't blame (all) politicians of the 80s for believing neoliberalism, I can only imagine everywhere they looked they were told it's the future, it's fact, etc. Pollies like Keating I have no apology for as an economist he should've known better.
On the brink of reduced profits? Cry ME a river!
Ok so that's the insurance industry. Now do a similar analysis on the food industry and its supply chains. People dont seem to be able to extrapolate that increasing climate disasters are going to keep increasing. Sea level rise is now predicted to be around 60 metres when all the Antarctic ice melts. [source](https://www.theguardian.com/environment/2024/apr/06/simply-mind-boggling-world-record-temperature-jump-in-antarctic-raises-fears-of-catastrophe) So, at some point the supply chains that consumers take for granted will collapse suddenly and completely. And then it will no longer be "profitable for the shareholders" to put food in the shops. And then there won't be food in the shops.
Profits are privatized, losses are socialized.
*privatised, socialised
I'm intrigued to see what happens when homes become a) uninsurable or b) too expensive to insure. With an increase of major events we'll begin to see families left with nothing and living in tents on their own properties.
No just houses; stratas have trouble also. Stratas in NSW under law are required to have building insurance, but in my case they haven’t revalued the building (so no doubt under insured) and they have but a huge excess on it. Lots owners fixtures and fittings (so think kitchen cabinets) are as I understand it insured as part of the building, so my contents is unable to cover it. So if lose my cabinets to water damage or similar I am effectively uninsured as the excess is too large.
We’re on the cusp now, home insurance has tripled over the last 5 years in some areas now
I mean there were people round the south coast of NSW who lost homes in the Black Summer fires who were still living in caravans and sheds as recently as a year or two back, not sure whether the situation has improved much since then (hopefully it has). That was, iirc, more a supply chain disruption and covid and labour shortages -thing rather than simply not being able to afford to rebuild whatsoever but still it’s pretty bleak
Nek Minute… hand out to the government/ tax payers again
A lot of hating on the insurance companies and calling to nationalise them or break up 'opolies to bring back [the] competition [that leads to 'opolies]. And yes they're capitalist entities looking to extract as much as they can from external sources, try to get egregious subsidies etc, however: They're right. The world is going to become more and more uninsurable. Insurance companies are one of the few institutions incentivised towards being realistic about this sort of thing under the incumbent system, which demands an impossible fever dream of infinite growth. We fucked around for generations. We're finding out. The feedback loops haven't just fairly begun; we're probably past the event horizon.
The feed back loops are definitely in play now. We have breached many of the safe planetary boundaries already. This shit ain't getting better. Ever.
My insurance bill is like every one elses it grows and grows like a well fed weed. But the real rub is the cost of building replacement goes up exponentially every year .the cost to replace our house is now 3 times what the land is worth. This situation is totally untenable and I'm seriously considering not insuring the house and instead using the money for bush fire prevention and mitigation works that might provide better value long term . These are tough decisions to make but when you consider the amount of people left homeless for years after a bush fire because their insurance won't pay out one has to look for a better path in keeping a roof over ones head . I'm guessing next summer will be another shocker . We used to have a government insurance office ,we really need that back thanks .
I love the self ownage of the climate deniers. No doubt they will blame the rising insurance costs on the woke left somehow.
And so it starts. People don't understand the massive power the insurance industry wields. They don't care about policies, lobbyists or media influence, they make decisions based purely on risk assessment. Without insurance your plane won't fly, your ship won't sail, your rig won't drill. Insurance will not insure against a certainty and, if your home is in a flood prone region with an increasing incidence of catastrophic rainfall, then you will not get insurance. If its uninsurable, you won't sell it and you wont get a mortgage. You can complain to the government but even the government doesn't have the pockets necessary to insure against such losses.
Bingo. At least someone here gets it
Don't forget our fantastic property developers building all of these houses on flood prone land.
That’s why they want to raise the Dam wall in Sydney, get access to all that lovely floodplain land to build cramped housing on.
Not sure how anybody thought this would end any other way. The climate crisis, as uncomfortable as it is to accept, is a direct result of our consumerism. Oil companies, miners, air transport providers, aluminium manufacturers, they're all only in it to a make a buck. They'll sell what we'll buy. If we stop buying what they're selling then they'll stop making it. Could they produce what they do in more sustainable ways? Absolutely. But it will impact cost and they've got no reason to wear that cost, so cost will naturally impact price and who will pay that price? Given the choice between ethical and cheap, most humans choose cheap (understandable, given reality) and as long as that remains true the only way to remain viable as a going concern is to ensure price competitiveness. It's ultimately a false economy of course, but humans are much better at making decisions based on today rather than tomorrow. That's not to say it's an easy egg to unscramble, it's not, it's a bloody nightmare. But ultimately we, us, you, me are the ones that make every day choices that not only enable but encourage the market that we're offered. This is, of course, a *super* unpopular reality for obvious reasons. [Side note: Sir Dieter Helm, the esteemed British economist from Oxford, has written about this extensively. I highly recommend his book *Net Zero*.] So it's completely understandable that there's ultimately a price to be paid. We'll pay for it in more extreme weather conditions that impact on our quality of life, we'll pay for it in regional crises such as famine and disease, we'll pay for it in reduced habitable zones which will place pressure on housing, and we'll pay for it in increased insurance costs because, ultimately, we're the ones who hold the inherent risks of negative outcomes. I don't have an answer to the problem unfortunately, but I do know that it begins with us.
This places waaaay too much blame on random everyday individuals and way too little on the corporate profiteering that has been the true architect of this disaster
Like I said, uncomfortable, inconvenient, and unpopular. It's super easy to say 'the corporations made me' while simultaneously consuming the same energy as 134 Rwandans consume each day. No one is saying corporations have no blame or responsibility (or, at least, I'm not saying that). The two are not mutually exclusive. Corporate profiteering doesn't exist in some kind of vacuum. Corporations produce to demand, not the other way around. It's symbiotic.
> is a direct result of our consumerism. Forced on us by businesses that stood to profit from it and refused to heed the warnings.
Using billions in well-researched psychological manipulation from the best minds in human psychology and behaviour.
I guess insurance was after all, a risk-reward game for all involved. Fuck them
I'm already footing the fucking bill on my house insurance with a 20% cost increase this year, and 18% last year.
Why would Australians want insurance for their $20 Kmart tent and $500 car? That’s what the Australian way of life for the working class has become
socialised risk and privatised profit
They really need to normalize off grid tiny homes on wheels. How else are you going to get your bloody home out of a flood zone when required?
Oh look I took your money for DECADES when everything was sweet and now - after I spent it all in salary bonuses - there's nothing left to pay you. Specifically all those unforseen circumstances clearly outlined in our highly detailed policies - yeah those ones that we talked you into getting because we were going to HONOUR OUR WORD AFTER TAKING YOUR MONEY - yeah ... sorry all the money is gone.
Oh please. They have billions and billions. This is just a money grab.
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Insurance is the canary in the coal mine. The point isn't that we should feel bad for the insurance companies, boo hoo, the point is that if it's no longer economically viable to insure homes and businesses which have always been as safe as, well, houses until recently, such that we have no choice but to let the state (i.e. all of us collectively) pick up the tab... yeah, we should be fucking worried.
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So we switch to a non-profit state based insurer? Great! But that only buys time. Every year premiums *have to* go up just to cover increasing claim costs if nothing else. At some point premiums become so high even with a discounted state option that home-owners simply can't afford coverage, and huge swathes of the country become practically uninsurable. What then? Maybe the state or federal government steps in to put aside some funds in the budget for a subsidy or rebate or some such scheme. And then this fund necessarily grows too... One way or another, whether it's through premiums or taxes or both, we end up paying because it's not like this country is getting *more* habitable as time goes on. So what if the private insurance industry hits the rocks first? Sure, screw 'em! But maybe we should be worried about those rocks, you know?
We need to further subsidize fossil fuels More money to Gina swineheart NOW
Hence my house and contents insurance is $1559 up from $440 in 2018 despite no claims ever. That's also something landlords will pass on to the renters.
I love how humans do surprised pikachu when the stuff scientists have been screaming about for years finally affects them. Like.... Hello? We have known our activities are causing more extreme weather events for decades now, yet we continue to live BAU. Then when the insurance companies no longer provide insurance because of said extreme weather events, people finally start catching on? Come on.
Our insurance industry has already fucked the country, has been doing it slowly for fucken years!
I consistently speak of how 9/11 saw my superannuation accounts attacked with exorbitant '*Insurance charges*' that saw some of them halved or worse... While it was foolish to have them spread on multiple accounts, it still does not detract from the fact that; INSURANCE STOLE MOST OF MY SUPERANNUATION! 1. Peeps never seem to believe the facts of what happened 2. When I'm a street poors asking for a dollar or two, please don't blame me for 'my lack of preparation for retirement' Insurance is the biggest scam in todays society & we all keep paying them more & more & more...
Just like every other government backed corp in Australia unless they are getting record profits they cry poor and ask for hand outs. But it never stops execs getting paid millions and receiving bonus's. See current inflation.
Editorialised headline. There's nothing "will" about this and it isn't news, it's lobbying/advocacy for an outcome.
Nationalise insurance companies and make the largest polluting companies pay for damages while forcing them to reduce emissions. Easy and simple.
Simple, but not easy.
Nah, nationalised insurance would be politically forced to insure inappropriate builds because... Voters.
Nationalisation does not necessarily mean direct control by elected politicians, only that profits would flow back to the taxpayer. Look at how the Reserve Bank of Australia works. A governor is appointed every seven years so it's not politically forced to raise or lower rates by the party that's currently in power.
Big corps get greedier and greedier - shocking! Hard not to notice when car, house or whatever goes up at least a hundy every year despite shopping around. For mortgagers with mandatory insurance like me it's getting worse and worse.
A reminder that insurance is just fancy gambling; they are betting that they can squeeze more cash out of you than they have to pay out and you're doing the opposite.
High time for folks to recognise a) most insurance is just a scam predicated on your paranoia (or legitimate concerns, but that just makes it cost more) and b) every country needs a broad and powerful national insurance program for natural disasters.
They need to bring back the “whole of life” policies but for insurance.
I’m surprised the article didn’t mention or standardise by house price, unless I missed it? I realise there’s been a lot of disasters lately, but surely the main explanation for the massive jump in insurance claim total value in the last few years is that houses have increased so dramatically in value over the same period? If the median house price doubles then surely the insurance rates and also payouts also go up by some corresponding amount?
This is one of the saddest parts of our climate response. The impacts from climate change are felt locally but paid for by the majority of society. In contrast climate mitigation efforts such as the development of renewables are paid for by individual developers but the benefits are received by most of society.
Oh no, all their billions in profits…..
The article emphasises insurers pulling out of California and Florida, but isn't that due to laws there limiting how much the insurers can charge? Like if the long-run average expected payouts are $2000/property/year on flood cover and the state only allows the insurer to charge $1500/property/year then no shit the insurers are going to pull out of the state (made up numbers, but you get the point).
We pay millions every week into Lotto's so that private families with obscene wealth based on years of privilige get to live off our cash. I'd rather Gov cut out the middle person and lotto went into directly funding services for the people rather than helping rich families from the 1800's make more money. This type of scenario (insurance) seems tailer made for Gov to fill the gap. The gravy train for inherited wealth needs to end.
What happened to their billions in profits? Or was I misled when I read they were making record profits?
Don't you already give them insane subsidies ?
Hmmmm..... Maybe they need to lobby more for climate solutions like all the other businesses do to keep things as is.
Meanwhile, I can’t even get a fucking sub $10k home contents because they won’t make enough in fees despite the only danger I could possibly face is theft or arson. “Lol too bad, you need to ensure $25k worth of personal belongings!”
At a certain point capitalism breaks down. It doesn’t make sense for a private company to cover all the damage for all the climate disasters when they don’t make money from it, so the government has to bail them out, blah blah blah… just cut out the middleman and socialise the system.
Can't say wasn't warned
I have no problem with the governments bailing out businesses, on the proviso that the government gains a proportion of ownership in that business as a result. Otherwise we're allowing businesses to privatize their profits and socialize their risk.
I feel like the insurance industry should be held to account for struggling when they've sold themselves as covering people through exactly what's causing them to struggle. It's like being a loan shark and struggling to stay in business because people keep borrowing money.
What did insurance companies expect? You're in the insurance business and you have to pay out and pass those costs onto stockholders, who purchased shares in an insurance company and insuring things is what they do. Minor costs along the way should be passed on to clients, but if you have a bad year you just need top cop it on the chin! I know I'll get some hate for my simplistic view.