Rising NQ insurance premiums spark calls for drastic, immediate solutions

Sep 21, 2023

NORTH Queensland leaders hold grave fears for their region which is quickly becoming uninsurable, despite the Cyclone Reinsurance Pool coming into effect more than a year ago, leading to calls for drastic action.

Katter’s Australian Party MPs for Kennedy Bob Katter and Traeger, Robbie Katter are calling on both levels of government to act swiftly in order to bring North Queensland’s premiums under control, with industry experts revealing some residential premiums had increased by 93 per cent in the last 12 months.

North Queensland Insurance Brokers Business Development Manager and industry veteran Paul Glasby said global events and subsequent reinsurance bills were part of the reason North Queenslanders were seeing rising premiums – referring to the estimated insurance bill of Hurricane Ian last of $50bn USD – $65bn USD.

He said on the data available, residential premiums in North Queensland had increased from 0 to 93 per cent in the past 12 months, averaging 20 per cent; commercial premiums changed from between -10 to 46 per cent, averaging 15 per cent and strata premiums had jumped between 10 and 24 per cent, averaging 15 per cent.

“Certain properties are becoming uninsurable,” Mr Glasby said.

“Primarily those remote, older, flood, storm surge and wind-exposed properties. We’ve got insurers fighting over insuring the modern properties while alienating the older Queenslanders.”

Mr Glasby said he could not see any evidence of the pool’s effectiveness in the past 12 months and said forcing insurers to disclose their rating models and loss ratios or history in the affected areas would be part of the solution.

“We can boost the cyclone pool by utilising the Australian Reinsurance Pool Corporation’s terrorism pool model – which we all pay for via our taxes but really are aimed at a greater risk towards metropolitan areas. If we used the same principal for cyclones, our premiums would be more affordable. We should also consider abolishing stamp duty on insurance by the State Government.

KAP leader Robbie Katter echoed Mr Glasby’s calls for a stamp duty exemption and said successive governments at both the State and Federal level, had enabled the perverse “market failure” that existed in the insurance industry in northern Australia.

He said the onus was on the Commonwealth Government to act by forcing insurers into the pool and to ensuring, and that the State Labor Government also had a role to play in the short-term.

“The KAP today re-issues its calls to the Palaszczuk Labor Government to ease the financial pain of Queenslanders between now and December 2024, by temporarily abolishing stamp duty on insurance premiums,” he said.

“This is tens of millions of dollars that is being drawn annually from the pockets of Queenslanders and being delivered to the State Government’s coffers – it’s a tax in its purest form and in 2021 it cost the public at least $65 million.

“The Premier and Treasurer have been doing a lot of talking about delivering cost-of-living relief and grandstanding about the $12 billion net operating budget surplus they posted in 2023-24, so to give reprieve would be just a drop in the ocean for the Government but would provide instant relief to those struggling at renewal time.”

Kennedy MP Bob Katter said the reinsurance pool was in place, and “there is no justification for what is discriminatory oppression against the people of North Queensland.”

“The treasurer simply has to call the insurance companies in, and say it’s unconscionable conduct, we don’t want to act against you, but we do not want to read tomorrow that there is a difference in price between Brisbane and North Queensland,” he said.

“The government must act and force the hand of insurers, absolutely.”

Mr Katter said rising insurance premiums were another example of essential services ballooning out of control and out of reach for Australians, following ALP decisions to “sell anything that isn’t nailed down.”

“The great Theodore governments of the last century, when there was a problem, they put in a people’s owned insurance company.

“This mob regarded it all as a chance to make windfall money so they can buy their way through the next election.

“Brisbane thinks we’re there as a milking cow for them, well they’re going to find out that the milking cow has been sent to the abattoir. They think every government resource should be a milking cow for the government.

“The assets they sold – the electricity industry, the railways, the ports, they just sold everything that was not locked down – which included the state bank and the state insurance office.”