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Thursday, July 18, 2024

Rising insurance premiums sparks call for solutions

NORTH Queensland is quickly becoming uninsurable despite the Cyclone Reinsurance Pool coming into effect more than a year ago, causing State and Federal politicians to call for drastic action.

Katter’s Australian Party MPs Bob and Robbie Katter are calling on both levels of government to act swiftly to bring North Queensland’s premiums under control.

Industry experts recently revealed that 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.

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,” he said.

“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 that the State Labor Government also had a role to play in the short-term.

“The KAP re-issues its calls to the State 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 “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.”

Keep up with the latest news in Cairns and the Far North, and check out some of our top stories this week: Encouraging international students to choose Cairns and Chalumbin Wind Farm redesigned.

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