An insurance giant has been accused of price gouging in disaster-prone communities by a senator at a parliamentary inquiry.
Greens Senator Mehreen Faruqi asked Suncorp why insurance prices were increasing beyond inflation during a hearing on the impacts of climate change on the insurance industry in Brisbane on Friday.
Suncorp executive Tim Buckett said the company had only made modest profits during flood and cyclone periods.
"We are here to rebuild towns when disaster strikes, so it is important that we earn a reasonable return on that capital," Mr Buckett said.
But Senator Faruqi pointed out Suncorp's profits increased more than 50 per cent in the past financial year and its consumer division's profits by in excess of 500 per cent.
She said NSW councillors told the inquiry on Thursday insurance companies were price-gouging flood victims.
"They say their experiences with insurance companies has been worse than the actual disaster," the Greens senator said.
Self-insured flood victims in regional NSW were paying less to repair their homes than people with insurance, councillors from Ballina and Lismore told the hearing.
Mr Buckett conceded the company had made mistakes in its handling of natural disasters but said the majority of people affected were happy with their insurance coverage.
Property owners in Queensland's cyclone region are paying up to 12 times more than those near the southern border and prices had more than tripled since 2022, according to a submission from the North Queensland Strata Action Group.
Mr Buckett argued insurance prices could drop if adequate disaster mitigation methods were put in place.
The federal government had made major investments into disaster mitigation in north Queensland and residents were still being denied coverage based on risk, the Queensland Local Government Association said in its submission.
Insurance prices are set for entire regions, which means residents pay more for risks that might not affect their community.
Mackay has not been hit by a cyclone since 1918 but property owners in the central Queensland city still pay for the threat.
Murweh mayor Shaun Radnedge said regional Queensland residents were turning to smaller insurance companies more willing to take a chance on disaster-prone communities.
"If we were to get an insurance company to come in to accept that risk, they could potentially take the whole market," he said on Friday.
The committee is due to report to the Senate on November 19.
