Probe findings disappoint
Findings from the long-awaited probe into insurance premiums in Northern Australia have been panned by industry stakeholders in the North West.
The main message from the Northern Australia Insurance Premiums task force was the need for improved mitigation strategies including higher building standards, better retrofitting and more public awareness.
Regional Development Australia Pilbara chief executive Diane Pentz said submissions reflecting concerns of home and business owners in the north had not been taken into account.
“In Karratha you are paying 400 per cent more than you’d be paying in Perth — that is just not rational,” she said.
“Since 2009, our costs have gone up enormously, sometimes as high as 800 per cent.
“Unless the Federal Government takes this more seriously and comes up with some really good solutions, it is hard to see how developing northern Australia will succeed.”
Ms Pentz said insurance was one of the biggest barriers in starting up small businesses in the North West.
Insurance Council of Australia chief executive Rob Whelan welcomed the report, backing the taskforce’s findings that mitigation was the only sustainable way to address insurance prices.
“Insurers have paid out more than $3.5 billion to North Queensland policyholders since 2006 due to cyclone damage alone,” he said.
“That is the fundamental reason insurance premiums have risen.
“Any strategy to reduce prices must address this or it will fail.”
Mr Whelan said the industry was already acting on calls to roll out products which rewarded customers who took steps to make their properties more cyclone-resilient.
Pilbara Regional Council chief executive Tony Friday said it did not make sense for inland areas such as Marble Bar and Newman to be subjected to the same build- ing standards as the Pilbara coast.
Other recommendations such as a mutual or reinsurance pool came with the caveat that, if implemented, they would come at “significant risk” to the Government and could not guarantee savings would be passed on to customers.
Mr Friday said the potential for the recommendations to benefit the public rested in the hands of the Federal Government’s willingness to act. “As expected they haven’t addressed the elephant in the room which is what about people who don’t insure?” he said.
Do I think the task force has been a waste of time, though?
“No, I don’t because we have a formal template there now.
“I’d like to see all of the recommendations subject to a detailed working party, then prioritised on the basis of time and benefit.”
Mr Friday said most people would be fine with pitching in a bit extra to their premiums to help out the east coast, but a fair balance needed to be found.
The Federal Government is expected to give a formal reply to recommendations in the report by June 30.
Member for Durack Melissa Price declined to comment.
WA Labor candidate for Durack Carol Martin failed to respond by time of print.
Pardoo Station after copping a direct hit from tropical cyclone Rusty in 2013.