NIBA has urged the Federal Government’s new taskforce on Northern Australia insurance affordability to use brokers’ knowledge, while pushing for insurance tax cuts.
On Monday, Assistant Treasurer Josh Frydenberg announced the group would examine policy options for addressing the high cost of home and strata insurance in the catastrophe-prone region.
“The taskforce will examine whether the Government could provide support to a reinsurance pool or a mutual insurer that provides cyclone-specific cover,” Frydenberg says.
“The taskforce would also assess the merits of other policy options that currently exist or are put forward by stakeholders during consultation.”
NIBA CEO Dallas Booth says brokers have firsthand knowledge of the issues at stake.
“We are very keen to work with the taskforce to examine these issues, and work out what else might be done to help business and home-owners in Northern Australia,” Booth says.
“Any discussion about premiums must be accompanied by strategies to reduce losses in the first place by making northern Australian properties more resistant to tropical cyclones and ensuring resources are committed to flood mitigation.
“The tax discussion paper released by the Treasurer is also timely as insurance taxes have a major impact on affordability.”
Insurance Council of Australia CEO Rob Whelan promised industry co-operation with the taskforce, and echoed Booth’s stance on insurance taxes.
“Taxes on insurance are an incredibly inefficient and unfair way to generate revenue for governments, and these taxes also discourage consumers from being properly insured,” Whelan says.
“No discussion about insurance affordability in North Queensland can ignore the burden that consumers carry in taxes – state and federal taxes add 19.9% to the price every household pays for their home, contents and vehicle insurance.”
Yesterday, ASIC launched an insurance comparison website for building and contents insurance across 800 North Queensland suburbs, which the Federal Government has been promoting as an aid to affordability issues for more than 12 months.
The site, which can be viewed here, compares indicative policies for 11 insurance brands, with more to be added in the coming months.
“The indicative premiums displayed in the comparison results returned by the website are not quotes and consumers will need to contact insurers for actual quotes specific to their circumstances and to purchase a policy,” ASIC says.
Meanwhile, a major insurer in the area has dropped its strata premiums in North Queensland by more than $1.3 million, after inspecting two-thirds of the buildings it insures in the region.
CGU’s strata specialist Strata Unit Underwriters (SUU) have spent the past year inspecting 335 of the approximately 500 properties it insures in North Queensland, where insurance affordability has been a hot topic in recent times.
So far, the inspections have allowed SUU to cut premiums for more than 7000 unit owners, by an average of about $150.
One in two have had their premiums fall by more than 10%.
In one in four cases, the inspectors were able to provide specific recommendations for further improving resilience, such as adding waterproofing around doors and windows and addressing inadequate drainage from guttering.
The remaining properties are expected to have been inspected by June.