On 30 March 2015, I announced a Northern Australia Insurance Premiums Taskforce to explore options for reducing home, contents and strata insurance premiums in Northern Australia.
I am pleased to announce that the Taskforce will be headed by Mr Mike Callaghan AM, a former Executive Director in the Australian Treasury. Mr Callaghan brings strategic senior leadership experience from both the public and private sector to the Taskforce. Mr Callaghan will lead a team of both public and private sector members and will be responsible for providing the interim report and the final report to Government with recommendations on the best way forward.
The Taskforce will be supported by a Reference Panel made up of experts representing the insurance industry, consumers and government. The Reference Panel will provide ongoing advice and feedback to the Taskforce in preparing their report and recommendations. I am pleased to confirm the following members:
- Mr Rob Whelan, CEO of Insurance Council of Australia
- Mr Dallas Booth, CEO of National Insurance Brokers of Australia
- Mr Gerald Ewing, CEO of Regis Mutual Management
- Ms Joan Fitzpatrick, Chair of the Australian Reinsurance Pool Corporation Board
- Ms Fiona Guthrie, Executive Director, Financial Counselling Australia
- Ms Margaret Shaw, Northern Australia consumer representative
The Queensland Government will also be invited to nominate a member of the Reference Panel.
The Taskforce will also consult widely with a range of experts and other stakeholders. Consultation is expected to begin in coming weeks.
Terms of Reference
The Taskforce is charged with exploring the feasibility of options that use the Commonwealth balance sheet to reduce home, contents and strata insurance premiums in those regions of Northern Australia that are experiencing insurance affordability concerns due to cyclone risk.
The Taskforce will:
- Establish which regions in Northern Australia are experiencing acute insurance affordability concerns due to cyclone risk;
- Outline options to reduce the cost of home, contents and strata insurance that stems from cyclone risk in these regions, including a mutual cyclone insurer and a cyclone reinsurance pool as well as other options that are put forward during consultation;
- For each option, undertake a thorough evaluation of:
- the potential reduction in consumer premiums;
- the likely cost and risks associated with using the Commonwealth balance sheet to lower the cost of insurance to consumers;
- the potential effect on the operation of the insurance and reinsurance markets in Northern Australia, particular the likely effects on competition; and
- how the role of the Government can be gradually reduced over time.
In conducting the review, the Taskforce will draw on a Reference Panel of stakeholder representatives and consult extensively, including with industry experts in insurance and reinsurance.
The Taskforce will provide an interim report providing policy options for consultation before providing recommended policies in a final report to the Government by November 2015.