Summer disasters, including floods in Queensland and bushfires in Tasmania, have led to Australia being re-rated on reinsurance markets.
Increased reinsurance costs for major insurers will be passed on to consumers, with increases of up to 300% for flood coverage in high-risk areas.
Losses from tropical cyclone Oswald now top $732 million, with the number of claims now exceeding 70,000.
Westpac tightens rules for flood insurance in high-risk areas
Westpac has tightened the rules for flood insurance in high risk areas, with a leaked internal memo to sales staff saying that consumers will need a Westpac mortgage before they are eligible for coverage.
"For immediate action … customers in high-risk flood areas will need to have a Westpac Group mortgage over the property to apply for cover," the memo says.
Westpac has confirmed the new policy, which came into effect as of Saturday, but points out the policy will only apply to new customers, with the rules judged on individual circumstances.
Credit unions lobby for financial system inquiry
Credit union and mutual society lobby group Abacus Australian Mutuals is set to issue new research calling for an independent inquiry into the nation’s financial sector ahead of the federal election.
The research, commissioned by Abacus and conducted by D&M Research, shows 65% of Australians believe competition is lacking in banking, 50% think the major banks' dominance in home loans is not good for the country.
The figures also show nearly half of respondents are confused by the multi-brand strategies of the big four banks, which include the use of the Bank of Melbourne brand by Westpac and Ubank by National Australia Bank.
The Dow Jones Industrial Average closed up 0.1% to 13981.8. The Aussie dollar is down to $US102.97 cents.