Meet the man behind the man who could stop the levy

acotrel says:

03:54pm | 25/02/11

Is that $30M figure being bandied about, a genuine quote from an insurance company?I wonder if the possible insurers believe in climate change and its potential to cause extreme weather events into the future?  Of course, just like the banks, they know the government would step up if the system fails, and they cannot afford to pay out for massive claims. Our recent spate of bushfires and floods must tell them something from which they can judge the size of premiums ? However the insurers must be aware the risk isn’t really there when they have the government which will foot the bill if they stuff up?

Tator says:

11:06pm | 25/02/11

As one of the few senators who reached an electoral quota on first preference votes only, people in his electorate in SA understand that he is not purely about “No Pokies” but is all about good governance as well.  People here see that in him and that is why he is a safe bet to stay in the Senate as long as he keeps up the keeping the government of the day accountable work he does as he believes it should be a true house of review and not a rubber stamp for government legislation.

Jim says:

02:12pm | 25/02/11

“I am wondering why someone with a single interest axe to grind so to speak, can hold a member of the senate in his thrall”

Are you talking about Bob Brown? Greg Combett? Rob Oakeshott? Tony Winsome? Bill Shorten? Paul Howes? Adam Bandt? Tim Fannery? ...who? Could be any one of them, but you threw me with the “independent thinker” line…

CynicalGoatWA says:

04:09pm | 25/02/11

No Xenophon is merely making the point that if it’s good enough for some states to take out insurance for natural disasters, then it’s not unreasonable to expect ALL states to do it. And if the Queensland government had not been so tight fisted, then we would not all have to dip into our pockets to make up the shortfall of an incompetent short-sighted state ALP government.
And before the hysteria sets in about not supporting Queensland getting back onto it’s feet, just remember that this levy is ONLY going towards re-building roads, bridges etc etc…inother words infrastructure. The Premiers appeal money (roughly $150 mill+) is going towards helping the mums and dads replace some of the basic appliances etc that they lost in the floods.

Jim says:

02:09pm | 25/02/11

Kinda like paying an advisor on climategate who is also running a geothermal business that gets truckloads of funding from the advisees…only much less criminal sounding.

Optics certainly do matter matt - $30m insurance to save the taxpayer $1.8bn and the government another $3-4bn….you do see the difference between a ‘m’ and a ‘bn’ don’t you?

Markus says:

03:15pm | 25/02/11

The current flood levy is what, $1.8 billion?
At $30 million a year, that amount would have them insured for 60 years, for a range of disasters that occur between every 30 years and every 100 years.
Of course more research would be required, but what part of even the most basic breakdown doesn’t add up?

Adam Diver says:

10:11am | 25/02/11

That was my intitial thoughts as well. The numbers simply do not add up, any chance of reasearch Malcolm or is that a bridge to far?

grumpy old man says:

03:13pm | 25/02/11

following your logic, there is no reason for any of us to carry insurance, we would be better off without it, and holding our hands out when something goes wrong.
Of course insurance companies make a profit, they are businesses after all, and thats what businesses do, however, the premiums they charge are relative to the calculated risk they accept ( with the exception of the political insurances such as medical and green slips). Retail insurance companies use reinsurance to spread the risk globally.
Perversely then, the more people that insure their property and possessions, the lower the overall insurance rates would become, since there is more money in the pot and the risk is spread further, impacting individuals less.
From my experience, it is an unusual year when I can’t negotiate my insurances down ( with the exceptions mentioned above).
I find it quite hypocritical for a Govt to insist that its population pay insurances such as Green Slips when they are not prepared to insure themselves, but rely instead on the generosity of the rest of the country.
Your insistence that the Australian insurance industry knows nothing about risk management is quite silly, and risk management was well understood by insurers and reinsurers well before the Australian Standard.
The Australian Standard ( AS 4360) is in fact a generic risk management document applicable to many industries, and not an insurance industry specific standard.

acotrel says:

08:22am | 25/02/11

The point about the Australian STandard is that our insurance companies have been around since the 14th century, and Australian Companies since the 19th century.  Yet we operated without doing simple risk assessments until 1992.  The concept of risk management was a black art, and even today our insurers don’t give monetary consideration to people who do their own risk assessments, and take action to control hazards. It doesn’t matter whether the disasters are covered by insurance policies, someone still has to pay.  The insurance companies will still make a profit.  So Where does the money come from? Pay the levy, and shut up!

acotrel says:

08:11am | 25/02/11

@Grumpy old man
’ If Qld had insured its infrastructure, that would not have affected my home insurance in NSW one iota,’

You must believe insurance companies are not there to make a profit? That’s like believing the urban myth that poker machines pay out a fixed percentage of the take!

jf says:

09:26am | 27/02/11

What a strange day today is when I find myself largely in agreement with acotrel.

You are right of course in that we end up paying whether it is with premiums over a period of time or in one lump sum when/if it happens.

Risk, of course, is priced based on the risk of something happening. Thus, the more likely an insured event is to happen, the higher the premium.

The one point I do disagree with you acotrel is that the Qld Government did not have a disaster recovery (risk management) plan at all.

Self insurance as part of a considered risk management plan is all well and good. Self insurance through inertia is another thing all together.

Catching up says:

10:49am | 25/02/11

Barry, there is already seven hundred million in the self insured fund that will be used in this disaster.  The funds come from the taxpayer, whether it is to self insure, pay insurance premiums or meet cost directly.  The only question that needs to be asked what is the most efficient, remembering that the present disaster are far outside the norm.

What needs to be made clear is what the governments are able to insure.  Premier Bligh made a statement that insurance they were offered did not include roads.

We also have the fact that Mr. Howard came to the same conclusion to self insure while PM.

Barry says:

07:03am | 25/02/11

Relying on a tax payer funded bailout is not self insuring.