The North fighting for insurance fix
Tired of seeing NQ businesses and residents get a raw deal from the failed insurance market, Townsville Chamber of Commerce has continued its advocacy for a federal intervention, with the backing of Chambers of Commerce from across Northern Australia.
The desire for a fairer deal in insurance isn’t new for the chamber, which first lodged a submission with the federal government in 2021 with four recommendations to reduce insurance premiums in cyclone-affected areas.
It provided a list of four recommendations “to create parity in the insurance market for northern Australia” and the Re-insurance Pool for Cyclone and Flood-related Damage was one recommendation that has been progressed.
With the continued market failure in insurance in the North, the chamber’s new chief executive, Heidi Turner, rallied support from northern chambers and industry groups.
“Our federal budget submission is backed by 19 chambers of commerce from Rockhampton right round to Exmouth in Western Australia,” she said.
“We discussed the challenges we’re all seeing across the north; it’s not just a Townsville thing, the cost of insurance is being felt heavily by businesses across the north of Australia.
“The reinsurance pool was announced three years ago but there are so many additional costs for businesses, and insurance premiums are a major part of those increasing costs.”
Ms Turner said unaffordable insurance was forcing businesses to take their chan
ces with reduced or no coverage, which created anxiety on the eve of Tropical Cyclone Kirrily’s impact with Townsville in January.
“Can you imagine having a grown man on the phone crying to you, worried there’s a cyclone coming, and he hasn’t got insurance for his business?” she asked.
“That really spurs you on.” Regarding the RPCFRD, the chamber has called for an interim review ahead of the legislated full review in July 2025, to ensure it is effective at reducing premiums.
Additionally, the chamber recommends that insurers should be required to provide products to all Australians rather than cherry picking the most profitable areas, that the government should create a national insurer providing a baseline of insurance, and the abolishment of tax on insurance, as it is an essential service.
“We’re already being punished by higher insurance premiums than our southern counterparts, this is then compounded by the addition of GST, plus stamp duty on top of all that,” she said.
“It’s extremely unfair that we are paying more tax for the same level of cover as businesses in other parts of the state and country … with horizontal fiscal equalisation it is effectively double-dipping from the state.
“We’d need more than one of our recommendations to come into play to ensure that there is no longer a market failure in insurance in the North.”
Ms Turner has met with the ACCC and asked it to include how many properties are insured and underinsured in its annual insurance monitoring report.
“We need to know the impact that these unsustainable premiums are having on our community, and to have clear data on how many properties are insured and underinsured,” she said.
“As the insurer of last resort if people don’t have enough cover the government will be the ones supporting businesses and communities to rebuild as we have seen in Cairns, and that is at a cost to us all.
“Mitigation isn’t an instant remedy for the longstanding market failure we’ve endured in insurance for over a decade.
“Currently, insurers can’t provide clear information on which mitigation efforts will lower premiums.
“While some are investing in systems to pinpoint risk for each property, the impact on their risk profiles is currently uncertain.
“We urgently require premium reductions.”