Chamber, Council join forces on insurance
Date published: 3 February 2021
Townsville City Council and the Townsville Chamber of Commerce are joining forces to call on the Australian Government to urgently act on the failure of the insurance market in northern Australia.
Mayor Jenny Hill said the Australian Government had buried its head in the sand on the issue while Townsville residents and business owners were struggling.
“Townsville and northern Australia has the potential to grow its population significantly and be the powerhouse of the Australian economy in the coming years,” Cr Hill said.
“But one of the main impediments to this growth and investment is the prohibitive cost and, in some cases, lack of availability of affordable insurance.
“Average insurance premiums in northern Australia are now almost double those in the rest of Australia.
“The market for insurance has clearly failed and the Federal Government has previously promised to take action, but we are yet to see any meaningful change.
“We cannot afford for this issue to continue any longer.”
In 2021-22 Federal Budget submissions lodged last week, Council and the Chamber both called on the Australian Government to establish a national reinsurance pool to help reduce the cost of insurance premiums.
Cr Hill said a reinsurance pool already existed through the Australian Reinsurance Pool Corporation, set up by the Howard Government in 2003 to address a previous instance of market failure.
“Council is encouraged that at least one of the largest insurance companies in the Australian market, Allianz, is open to the idea of a reinsurance pool, as demonstrated in their submission to the ACCC inquiry,” she said.
The Townsville Chamber of Commerce has also made 4 recommendations to this year’s Federal Budget.
- the requirement of an insurance pool for the geographical area of northern Australia to cover for the events of cyclones and floods that is linked to the Australian Reinsurance Pool Corporation
- the obligation for an insurer to provide insurance for all of Australia
- a National Insurer providing a baseline insurance for all Australians
- the abolishment of stamp duty and GST on insurance premiums.
Chamber of Commerce president Michele Falconieri said the situation was becoming dire.
“Insurance is an essential service for individuals and business owners,” Mr Falconieri said.
“The ACCC identified that there is a very clear issue and we need the government to act urgently.
“The Townsville Chamber of Commerce has developed four recommendations and made a submission to the federal budget.
“Copies of the submission and recommendations have been sent to all levels of government and the recommendations are supported by surrounding Chambers of Commerce and Regional Development Bodies as these impacts are not just being felt in Townsville.
“This is an important issue for the development of northern Australia and all three levels of government have to address and highlight this failure of an essential service.
“It is great to see the Townsville City Council joining with the Townsville Chamber to advance the discussion on this important issue of insurance.”
Another sector struggling with insurance costs is strata title managers.
“Property owners in apartment buildings are suffering financial hardship due to the high cost of strata insurance in North Queensland,” Ann Greer, the chair of the body corporate for an inner-city unit complex, said.
“State law prevents bodies corporate from refusing insurance – therefore forcing bodies corporate to pass costs on to residents via huge levies.
“Residents aren’t able to sell up due to potential buyers being more than aware of the cost – trapping residents in apartments at a huge personal cost.
“I’m aware of some buildings coughing up to $500,000 in premiums but with inadequate coverage. Other buildings are negotiating periodically with insurers, unsure if they’ll be offered insurance the following month.
“This isn’t tenable.”