New insurers are “cherry-picking” the best clients, according to an industry expert.

LMI Group MD Allan Manning spoke about flood insurance pricing and mitigation at last week’s Territory Insurance Conference in Darwin.

He later told insuranceNEWS.com.au Big Data and geospatial technology are changing flood cover.

Professor Manning says the technology has enabled new players to take on only the “best clients”, electing not to insure flood-prone areas such as northern Queensland and putting pressure on other insurers.

“New entrants coming into the market such as Youi and Real are cherry-picking the clients,” he said. 

Professor Manning also discussed underinsurance at the conference, specifically relating to the Tianjin port explosion in China and its interruption to Australian businesses.

He described the explosion as “up there with the World Trade Centre”, costing an estimated $3.3 billion and destroying 12,000 cars, 1.5 million shipping containers and the port railway station.

Professor Manning says many people are unaware of two more major chemical explosions in China since the Tianjin blast in August.