Senator the Hon. Mathias Cormann
Minister for Finance
The Government is today releasing a report by the Australian Government Actuary into home and contents insurance pricing in North Queensland. This report examines the causes of home and contents insurance premium increases in North Queensland.
The report found that North Queensland premium rates increased by about 80 per cent from 2005-06 to 2012-13. In Sydney and Melbourne, the increase over the same period was around 12 per cent.
For insurance purposes, cyclones are the key risk in the region and the report found that premium increases in part, reflect insurance losses from weather events during the period.
The report also notes that competitive pricing pressure is largely missing in North Queensland and as a result, insurers have been able to increase rates largely unconstrained by competitive forces.
This report and two previous reports undertaken by the Government Actuary on strata title insurance pricing in North Queensland, demonstrate why Government action is required to address the high cost of insurance and promote competition in that region.
In October, we announced a range of initiatives to tackle the high cost of insurance in North Queensland, including:
- Establishing a comparison website to help consumers to compare home building and home contents insurance.
- Clarifying that licensed brokers can sell policies from foreign insurers where they offer consumers a substantially better price.
- Developing a program of engineering assessments for strata properties in North Queensland, to improve information available on buildings’ susceptibility to storm damage and promote resilience.
The Government is committed to addressing the high price of insurance premiums in North Queensland. Our initiatives tackle the high cost of insurance, while also minimising the regulatory burden. We are determined to assist consumers in North Queensland to get a better deal.