North Queenslanders will soon be able to use a ASIC-run comparison website to compare home and contents insurance policies, after the Federal Government moved ahead with its plans to address insurance affordability issues in the region.
Finance Minister Mathias Cormann says the site will allow consumers to compare the performance of insurers on price, product features and claims handling complaints.
First floated at the beginning of the year, the site is set to be up and running by March next year and is part of a raft of measures.
“The Government is also boosting competition by clarifying that licensed brokers can sell policies from foreign insurers where they offer consumers a better price,” Cormann says.
“We are also working closely with the Queensland Government to develop a program of engineering assessments for strata properties in North Queensland. This will improve information available on a building’s susceptibility to weather damage and ways to make properties more resilient.”
NIBA CEO Dallas Booth says he welcomes any initiative that helps explain insurance to the community, although NIBA’s submission on the discussion paper warned about possible problems comparison websites could cause.
“It will be critically important that the web site makes it clear everyone’s risks and insurance needs are likely to be different, and more importantly, the terms and conditions of the various insurance policies differ in important respects,” he says.
“So, the people should not make insurance decisions based on price, on the assumption that all cover is the same.”
The Government’s own discussion paper acknowledged there are concerns that the comparison websites can create an undue focus on price.
Booth says the Government’s approach to unauthorised foreign insurers would give brokers the flexibility to determine where the best cover for their clients might be, either in the Australian market or from a foreign insurer who they have complete confidence in and are happy to recommend to their clients.
“Under the Insurance Regulations, insurance brokers can place insurance business with an unauthorised foreign insurer if the terms (including price) available from an Australian insurer are substantially less favourable to the insured than the terms available from the foreign insurer,” he says.
“Brokers are required to keep written records of the inquiries they have made and the reasons why they believe the cover from the Australian insurer is substantially less favourable.”
Meanwhile, the Australian Government Actuary is also preparing a report on home insurance pricing in North Queensland, following on from another report on strata pricing that found North Queensland premiums were mostly fair.
Suncorp announced earlier this week it was teaming with James Cook University for an ambitious project aimed at improving North Queensland’s cyclone resilience.