Despite the Federal Government’s own actuary finding premiums in North Queensland are fair, a leading MP has called for radical changes to pricing in the region.
The findings of the report showed that premiums in North Queensland were five times more expensive than anywhere else in the country because of historical under-pricing and high levels of risk accumulation, a finding backed by NIBA CEO Dallas Booth.
However, Leichhardt MP Warren Entsch told the Whitsunday Times there is no logical explanation for why premiums are so high.
“Yes we get cyclones in North Queensland, but there are floods, fires and storms in these southern cities, which carry their own significant level of risk and it’s certainly not one-fifth ours – that’s not justifiable in anyone’s book,” he says.
While Entsch claims the market needs more competition, the Insurance Council of Australia (ICA) had an opposite view of the AGA report.
In a public statement ICA Chief Executive Rob Whelan says the report was founded on accurate information and properly reflects the pricing in the strata insurance market.
“The report supports the evidence that insurers have provided to the Federal and Queensland governments since 2011, and also demonstrates that pricing is reasonable,” he says.
“Market driven responses are the only practical and appropriate solution, and we implore governments to take this report into account before considering any form of intervention.”