MEDIA RELEASE: Intensifying advocacy for lower insurance premiums

Posted: 31 March 2024

MEDIA RELEASE: Intensifying advocacy for lower insurance premiums


Townsville Chamber Intensifies Advocacy for Fair Insurance in Northern Australia

Tired of seeing North Queensland businesses and residents get a raw deal from the failed insurance market, the Townsville Chamber of Commerce is intensifying its advocacy for federal intervention. Backed by Chambers of Commerce from across Northern Australia, the call for a fairer insurance market continues to gain momentum.

The push for equitable insurance is not new for the Chamber, which first lodged a submission with the federal government in 2021, outlining four recommendations to reduce insurance premiums in cyclone-impacted areas. Among these was the Re-insurance Pool for Cyclone and Flood Related Damage (RPCFRD), a recommendation that has since seen some progress.

With continued market failures in insurance across the north, the Chamber’s new Chief Executive, Heidi Turner, has rallied support from northern chambers and industry groups.

“Our Federal Budget Submission is backed by 19 chambers of commerce from WA, Northern Territory and Queensland, spanning from Rockhampton to Exmouth in WA,” said Turner. “The cost of insurance is being heavily felt by businesses across Northern Australia, not just in Townsville.”

Mrs. Turner highlighted that while the reinsurance pool was announced three years ago, additional costs continue to burden businesses, with insurance premiums being a significant part of these increasing costs.

“Unaffordable insurance is forcing businesses to take their chances with reduced or no coverage, creating anxiety, especially during events like Tropical Cyclone Kirrily in January,” she said. “Imagine having a grown man crying on the phone, worried about an approaching cyclone without insurance for his business. That really spurs you on.”

The Chamber has called for an interim review of the RPCFRD ahead of the legislated full review in July 2025, to ensure it effectively reduces premiums. Other recommendations include:

  1. Insurers should provide products to all Australians, not just the most profitable areas.
  2. The government should create a national insurer to provide a baseline of insurance.
  3. Abolish taxes on insurance, recognising it as an essential service.

“We're already punished by higher premiums than our southern counterparts, compounded by GST and Stamp Duty. It's extremely unfair that we pay more tax for the same level of cover,” Turner said. “With horizontal fiscal equalisation, it is effectively double-dipping from the state.”

Turner met with the ACCC, requesting they include data on insured and underinsured properties in their annual insurance monitoring report.

“We need clear data on the impact of these unsustainable premiums. If people don’t have enough cover, the government will end up supporting businesses and communities to rebuild, as seen in Cairns, at a cost to us all,” said Turner.

“With rising premium costs comes less people taking insurance and that is a bigger problem that will continue to undermine the principal insurance.  It is a very old simple concept - many people pay a little money to create a bigger pool of money so that anyone who is unfortunate enough to suffer a loss is reimbursed financially for that loss.  Less people paying in means less money in the pool."

“Mitigation isn't an instant remedy for the long-standing market failure. We urgently require premium reductions, and tax adjustments are a lever that both federal and state governments can employ.”

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