The Government is establishing a taskforce to explore options for reducing home, contents and strata insurance premiums in Northern Australia.
Insurance costs in North Queensland are five times higher than in Sydney and Melbourne for strata insurance and two-and-a-half times higher for home insurance. The biggest driver of these higher prices is cyclone risk. Similar issues exist in other cyclone-prone regions of Northern Australia.
Improving affordability will address concerns around under insurance, ease cost-of-living pressures for families and support the economic development of Northern Australia.
The taskforce will examine whether the Government could provide support to a reinsurance pool or a mutual insurer that provides cyclone-specific cover. The taskforce would also assess the merits of other policy options that currently exist or are put forward by stakeholders during consultation.
The taskforce will be headed by a senior official supported by staff from the private sector and relevant government departments, and draw on a reference panel of industry experts, including in the areas of insurance and reinsurance. The taskforce will undertake extensive consultation with the insurance industry and other stakeholders. The cost of establishing the Taskforce will be met from within departmental resources.
The taskforce will be established as soon as possible and will operate for six months. It will provide an interim report after three months, and then a final report with recommendations on the best way forward.
The Government is delivering other initiatives to tackle high insurance costs in Northern Australia. A comparison website for home and contents insurance will be launched this week. There will also be a program of engineering assessments of residential strata properties in North Queensland to improve information available on buildings’ susceptibility to storm damage.
This announcement supports the Government’s plans to develop Northern Australia’s potential with more investment, infrastructure, jobs and services.