The last government-owned insurance company might soon be up for sale, but there are concerns over the possible loss of valuable underwriting expertise.
The Northern Territory Government has begun canvassing the possible sale of the Territory Insurance Office (TIO) under the Federal Government’s privatisation program, known as the Asset Recycling Initiative.
TIO was established in 1979, when there were few insurers operating in the Territory. NT Chief Minister Adam Giles says there are now 12 insurers present in the market.
“Cabinet is seeking to ascertain whether the Government should be in the business of owning a financial services business or whether it would be more beneficial to unlock the value of taxpayers’ investment in TIO to fund economy-growing infrastructure that is critical to the development of the Northern Territory,” Giles says.
“No final decision has been reached regarding TIO but any option that was considered in the future would have to ensure Territorians would still be able to access flood and cyclone insurance and that we protect the TIO brand.”
OAMPS NT State Manager Stewart Cox says there was strong opposition to the sale of TIO when the option was last mooted, in 2010, but community sentiment this time around would depend on what was being proposed in terms of infrastructure investment.
He says TIO does currently offer Territorians benefits unmatched by other insurers, such as storm surge protection in domestic policies.
“The TIO underwriters also have a lot of knowledge about local conditions,” Cox says.
“Some of the other insurance companies are interstate and don’t have a lot of understanding around the quirks of the climate and the building codes here. TIO really know the risks.”