A flood levee upgrade in Wagga Wagga is not reflected in insurer underwriting, with home premiums instead quadrupling, a local broker says.

Persistent use of flood mapping from before the upgrade has left the CBD and north Wagga Wagga “uninsurable”, J&B Insurance Brokers director Georgina Brown posted on LinkedIn. 

She questions the logic of premiums soaring and many insurers exiting the area following a levee improvement, and believes it is because insurers are misinterpreting the National Flood Information Database.

Insurers use the NFID to determine flood risk for individual properties. It is based on government flood mapping. 

“Many of them have old information from before the levee upgrade. We were told to expect rate relief, but that never came. In fact, premiums have only skyrocketed,” Ms Brown told insuranceNEWS.com.au. 

An Insurance Council of Australia spokesperson said today the levee upgrade in Wagga Wagga “has been accounted for in the NFID and has been made available to insurers who use NFID”. 

Most insurers use the NFID and “multiple other data sources” to calculate premiums, ICA says. 

But Ms Brown believes a council data subset reflecting the levee upgrade is being overlooked when insurers interpret the data for Wagga Wagga. 

“I’m confident it’s due to an error at the source, or a misreading of the source. It could be just an oversight, but because it is at a source level, it’s just cascaded down to every company that uses this [NFID] resource. 

“Every single insurer wanting exorbitant premiums in Wagga that has revealed its sources has shown me pre-levee data. 

“Once you realise they could all be using a common source, then it could be an issue.” 

Ms Brown is also concerned Swiss Re’s CatNet tool, used by many insurers, uses pre-levee data for the Wagga Wagga CBD.  

A Swiss Re spokesperson told insuranceNEWS.com.au today: “The version referenced here provides a proprietary, global view of flood risk (among other natural perils) before local protection measures are applied.” 

Swiss Re says newly developed options in the suite are “available to complement this to include additional datasets, i.e. a global flood view that models the impact of actual and estimated protection measures”.  

Ms Brown says home premiums start at $15,000 and one insurer recently requested a $20,000 premium for a home in the NSW town after quoting just $8000 last year and $5000 in 2023. 

“We’re unable to assist clients with home insurance now,” she said. 

ICA says insurers take different approaches to calculating premiums and can offer significantly different rates for the same property based on their methods and approach to risk. 

“Premiums across Australia have experienced recent increases, reflecting the impacts of significant disaster events, increases in global reinsurance premiums and higher inflation,” its spokesperson said. “These increases have occurred even in areas that have not experienced recent flooding.” 

Ms Brown says she is left feeling “disregard from the industry seems systemic and deliberate” after six months seeking firm answers on the levee data issue.  

“Naively, I thought providing accurate council flood data for our area would be enough, but the notion this could be questioned and remedied seems like too big an ask – my queries go nowhere. 

“We’re stuck, we can’t get any of them to recognise that something’s off. It doesn’t marry up and doesn’t make sense – something is not right and yet I’m not getting answers.” 

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