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.