THE upper echelon of Australian insurers has been put on notice by the Assistant Treasurer today, with Sen. Arthur Sinodinos telling the industry’s annual conference that increasing insurance affordability in North Queensland was firmly on the Government’s agenda.
The move has been strongly endorsed by Leichhardt MP Warren Entsch, who said it was fantastic to see the issue being put “fair and square” into the national arena.
Providing the keynote address at the 2014 Insurance Council of Australia Regulatory Update Seminar, Sen. Sinodinos described insurance affordability in FNQ as a “vexed issue”
“Insurance needs to be affordable and accessible,” he told the gathering of insurance company CEOs and industry executives on Friday. “If insurance is unaffordable and out of reach, people are left vulnerable and can be unable to withstand financial setbacks.”
Sen. Sinodinos said that during visits to North Queensland over the last 12 months he had heard “some real horror stories” about the jump in insurance premiums.
“Whilst it’s important for us to look at what is driving some of that and how we can mitigate the increase, in the absence of any progress on this issue, we as a Government have decided to take action to address this problem,” he said.
Mr Entsch said it was very significant to see acknowledgement of the insurance crisis at such a high level and congratulated the Assistant Treasurer for his advocacy.
“Arthur has been here, he’s spoken to people who have been impacted, he actually understands the crisis, and now he’s addressing the Insurance Council of Australia – an organisation that’s had its head in the sand for far too long,” Mr Entsch said.
“With the issue being featured in today’s Financial Review, people will start to realise that it’s not just a local issue for Cairns and other parts of Northern Australia.
“This is a national issue for Brisbane, Melbourne, Sydney and Canberra… all those mum and dad investors who have put their life savings into a dream holiday unit in the Whitsundays or Cairns or Port Douglas and have now seen their investment crash.”
In his address to the ICA, the Assistant Treasurer outlined the key actions that the Federal Government is currently undertaking, including the development of an insurance aggregator website for the North Queensland insurance market for strata, home building and contents insurance, as well as development of a programme of engineering assessments for strata properties in North Queensland, to identify risks that can be mitigated.
In addition, the Australian Government Actuary is due to report back in April on a study into insurance prices for FNQ strata properties over the last eight years, comparing them to those in Melbourne, Sydney and Adelaide, to increase transparency around the causes of strata insurance prices in North Queensland over recent years.
“It’s important to acknowledge that no single initiative will address this complex issue,” Mr Entsch said. “However, all of these actions are a significant step in the right direction.
“We’ll also be tying in with the State Government’s action plan, which working to address their areas of responsibility.
“Together with the pressure we’re putting on the insurance companies, and legislative and regulatory measures we’re looking at outlining in the Budget, there’s no doubt that this Government is absolutely committed to putting downward pressure on insurance premiums.”