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Insurance taxes discouraging, says Lloyd’s chief, 16 March 2009

The Victorian bushfires have illustrated the dangers of over-taxing insurance policies, particularly in times of economic recession, Lloyd’s CEO Richard Ward said yesterday.

Mr Ward, who is on his first visit to Australia since taking up the CEO’s job in 2007, was a keynote speaker at the Steadfast Convention on the Gold Coast. He told that the underinsurance threat is “a very worrying social phenomenon”.

“During a recession our insureds are going to have to look at their costs and how they spend their money,” he said. “It concerns me that we may see far more individuals and businesses under-insuring as a result of tighter financial restraints.”

Mr Ward says the Victorian bushfires have revealed a worrying number of people who haven’t insured their properties at all.

“You do have to wonder if the tax regime is discouraging people from taking out insurance, when governments should be doing the exact opposite,” he said.

“The cost of the fire services is something that should be spread across the whole community.”