Probe into in­sur­ance pre­mi­ums

Broome Advertiser - - Front Page - Glenn Cord­ing­ley and Jakeb Wad­dell

Broome prop­erty own­ers have wel­comed a high-pro­file in­quiry into high in­sur­ance costs across north­ern Aus­tralia, which in­cludes a pub­lic meet­ing in town for peo­ple to air their views.

The Fed­eral Govern­ment has told the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion to use its ex­ten­sive pow­ers to ex­pose why res­i­den­tial build­ing, con­tents, and strata poli­cies have sky­rock­eted and whether providers acted eth­i­cally in pric­ing.

As part of the probe, the ACCC has in­vited the pub­lic to make sub­mis­sions and at­tend a num­ber of its meet­ings in af­fected towns and cities.

One of them is due to be held at the Oaks Ho­tel in Broome at 5.30pm on Wed­nes­day, Novem­ber 29.

The pub­lic will have di­rect in­put to the ACCC task­force at the meet­ings tak­ing place this month and in De­cem­ber.

ACCC deputy chair­woman Delia Rickard said the fo­rums would al­low the com­mis­sion to hear di­rectly from peo­ple in north­ern Aus­tralia about their ex­pe­ri­ences of the in­sur­ance mar­ket.

“Our in­quiry aims to iden­tify the bar­ri­ers that pre­vent con­sumers from ac­cess­ing af­ford­able, ap­pro­pri­ate and com­pre­hen­sive in­sur­ance,” she said.

Ms Rickard said the ACCC would use its com­pul­sory in­for­ma­tion gath­er­ing pow­ers to di­rectly ac­cess in­sur­ers.

“This is some­thing other in­quiries have not been able to do,” she said.

“We are also seek­ing con­sumer and in­dus­try in­put on price, pol­icy cov­er­age, and any bar­ri­ers to con­sumers get­ting a bet­ter deal.”

Broome-based Phoenix In­sur­ance Bro­kers man­ager Clare Smith says the in­quiry could go deeper into look­ing at all prop­erty risks, be­cause both com­mer­cial and res­i­den­tial prop­erty own­ers were af­fected by the re­duced num­ber of in­sur­ers in the re­gion.

“It is our hope that the in­quiry also ex­am­ines the cur­rent govern­ment sup­port for North West com­mu­ni­ties,” she said.

“In­sur­ers pro­vide pre­mi­ums based on the rel­e­vant risk pro­posed to them and a re­duced risk pro­file should re­duce the pre­mium re­quired.”

Real Es­tate In­sti­tute of WA Kim­ber­ley chair­man Tony Hutchin­son said high pre­mi­ums had led to fi­nan­cial strug­gles for home own­ers.

“It’s a vi­cious cy­cle at the mo­ment, so an in­quiry is cer­tainly needed,” he said.

“There are a limited num­ber of com­pa­nies pre­pared to pro­vide cover in the re­gion, so it ap­pears in­sur­ance costs have be­come very high, which puts even more pres­sure on prop­erty own­ers strug­gling to meet mort­gage re­pay­ments.”

Du­rack MHR Melissa Price said the in­quiry would be able to dig deeper than a pre­vi­ous Fed­eral in­ves­ti­ga­tion in 2015.

“The ACCC’s re­mit will be to de­ter­mine whether or not the in­sur­ance providers have acted eth­i­cally in the mar­ket­place,” she said.

The ACCC is ex­plor­ing in­sur­ance prices and pol­icy break­down costs, mar­ket com­pet­i­tive­ness in north­ern Aus­tralia and how con­sumers in­ter­act with mar­kets, and po­ten­tial bar­ri­ers to con­sumers mak­ing wellinformed choices.

Sub­mis­sions are due on De­cem­ber 21 and can be emailed to in­sur­ance@ accc.gov.au.

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