I rise again today to talk about the insurance crisis in northern Australia. Unfortunately, the insurance industry is still not serious about improving the affordability and the availability of property insurance in northern Australia.
Submissions to the northern Australia insurance task force from the insurers and the Insurance Council of Australia have been overwhelmingly against government action.
The ICA's representation on the task force continues to be disruptive, rather than constructive, and the industry still says there is not a problem. This is despite the Chamber of Commerce and Industry Queensland's submission outlining business insurance hikes of up to 2,500 per cent.
The ICA presented a very misleading submission. They got four of the major insurance companies to quote on properties in the postcode of 4825; they said that is in northern Australia. They came back with fabulous prices and said there is not a problem. 4825 is Mount Isa. I asked them to tell us the last time there was a cyclone in Mount Isa!
All the submissions from outside the insurance industry, however, recognise the need for intervention and said that there is a real threat to economic growth in northern Australia. The ICA continues to play no positive role in this. But why would they want to change?
Clearly, it is the operation of the large insurance companies; Suncorp just announced a $1.13 billion profit last year. The outgoing CEO, Patrick Snowball, took home almost $10 million in his pay cheque for the year and he justified this by saying that the profits were up 220 per cent since his arrival 10 years before, and the total shareholder returns were 124 per cent. So why would they want to see changes?
Suncorp, through their Protecting the North package, now wants the government to pay for retrofitting properties in Far North Queensland. They are only focusing on risk assessment and mitigation on pre-1982 buildings that are owner occupied by low-income families.
These restrictions certainly do not help the post-1982 properties that were built to cyclone standards but whose premiums have skyrocketed also. And this, of course, has caused major problems for those tenants. I understand that most of the strata market in northern Australia is in this category.
I understand that Suncorp is now prepared to expand the scope to post-1982 properties, but I think it is important to note that roofs only last about 40 years or so, so most of the homeowners were already in the process of replacing their roofs and it is a council requirement that they be retrofitted.
Something has to be done about this and I have to commend Margaret Shaw for her very comprehensive work as the northern Australia representative on the task force reference panel. I certainly will continue to argue for a northern Australia mutual, or a disaster reinsurance pool, to look after or get a better outcome for northern Australia.