‘Greed-driven in­sur­ers’

Port Douglas & Mossman Gazette - - FRONT PAGE -

I read with in­credulity the ar­ti­cle ‘‘Insurance prices ‘re­al­is­tic’’’ ( Gazette, Oc­to­ber 24), stat­ing that the Insurance Coun­cil of Aus­tralia be­lieves insurance premi­ums ‘‘ac­cu­rately re­flect risk’’ in North Queens­land. The only fair jus­ti­fi­ca­tion for mas­sive in­creases in premi­ums is that there is a higher risk of se­vere dam­age in the re­gion now than there was pre­vi­ously, NOT that the in­sur­ers did not ac­cu­rately as­sess risk prior to nat­u­ral dis­as­ters and are now try­ing to re­coup their losses. The ICA’s Camp­bell Fuller de­scribes North Queens­land as ‘‘one of the most dis­as­ter­prone ar­eas of Aus­tralia’’. I find this very hard to be­lieve go­ing by the fre­quency of bush­fires, se­vere storms and flood­ing that takes place in other parts of Aus­tralia. He goes on to say that of the nat­u­ral dis­as­ters of the last three years, Queens­land has been about 50 per cent of the insurance losses. Queens­land is far broader than just Far North Queens­land! He also states that since 1970, 15 cy­clones have come within 100km of Cairns. If so, the in­sur­ers have had 40 years’ worth of data about cy­clone fre­quency in FNQ on which to as­sess risk. Why then the sud­den 800-1000 per cent in­creases? Surely if the in­sur­ers were cor­rectly analysing risk, they would have al­lowed for th­ese in their pro­jec­tions. In­stead they have sat back rak­ing in premi­ums, se­cure in the knowl­edge that they rarely had to pay out. In ad­di­tion, flood risk may be a small pro­por­tion of the pre­mium but why do in­sur­ers refuse to of­fer it in coastal ar­eas like Port Dou­glas, while it’s com­pul­sory on the hill slopes of the Daintree which are im­pos­si­ble to flood? None of Mr Fuller’s com­ments ad­dress the fact that mar­ket fail­ure has spread from strata to ru­ral res­i­den­tial, B&B, res­i­den­tial, busi­ness and now boat insurance. They do not ad­dress the fact that by re­fus­ing to in­sure prop­er­ties with cer­tain post codes, they are deny­ing prop­erty own­ers the abil­ity to ful­fil a le­gal obli­ga­tion. They do not ad­dress the fact that greed-driven in­sur­ers are still re­port­ing mas­sive prof­its at the same time as prop­erty own­ers are suf­fer­ing life-chang­ing fi­nan­cial and per­sonal stress. At the end of the day, there is no doubt in my mind that price goug­ing and mar­ket fail­ure are ev­i­dent. We are now see­ing grow­ing high-level con­cern about the sit­u­a­tion – Queens­land Pre­mier Camp­bell Newman recog­nised this week that it is ‘‘the big­gest is­sue fac­ing peo­ple in North Queens­land’’ and the Cham­ber of Com­merce and In­dus­try Queens­land’s Brett Moller has said pub­licly that busi­nesses are reach­ing ‘‘cri­sis point’’. The Fed­eral As­sis­tant Trea­surer, Se­na­tor Arthur Sin­odi­nos, will meet with the CEOs of some of the big­gest in­sur­ers in Syd­ney next week. Hav­ing been the ‘‘voice in the wilder­ness’’ for so long on this, I’m de­ter­mined to keep the mo­men­tum go­ing and en­sure ac­tion at a fed­eral level takes place to com­ple­ment moves by the state gov­ern­ment, the in­sur­ers and con­sumers them­selves.

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