Fels queries Suncorp premium rise
The NSW Emergency Services Levy (ESL) Insurance Monitor says it is investigating the basis for a jump in Suncorp’s home insurance premiums.
Monitor Allan Fels says Suncorp base premiums last month increased an average of 17.5% across locations featured in a monthly survey of property cover, which is produced to ensure insurers do not overcharge after the Government last year retained the ESL rather than remove it.
“Suncorp needs to demonstrate that the re-establishment of ESL is not being used as an opportunity to increase base premiums unreasonably,” Professor Fels said.
A Suncorp spokesman says the impact of the levy is clearly displayed in a separate line on notices, while the company regularly reviews pricing and its competitive position in the market.
“Insurance policy pricing is based on numerous factors including the risk and costs of natural hazards, as well as costs associated with reinsurance, materials and labour for home repairs,” the spokesman told insuranceNEWS.com.au.
The monitor’s survey shows base premiums since a year earlier have increased by an average of 2.5% across the major brands, including the impact of the substantial recent rise by Suncorp.
Compared with April, total premiums across locations and insurers last month increased by an average of 0.8%.
“Suncorp has generally been below the sample average, but the latest increase has moved it to just above the market average,” the Monitor’s report says.
The survey also shows some insurers quoting more than double the price of rivals on home cover for identical properties in NSW.
“This survey of premium prices quoted by 12 major insurers shows there are significant variations in pricing between brands for essentially the same insurance cover,” Professor Fels said.
“There is no doubt many consumers could save hundreds of dollars by shopping around and switching to a cheaper supplier.”
The report provides a monthly comparison of quotes for 12 major brands of household insurance, covering identical properties in 11 locations in the state.
On average the total premium across all locations last month was $1813.
Insurers that quoted well above the average included NRMA Insurance, OnePath and QBE, while those quoting well below the average included Allianz, Woolworths, Coles and AAMI.
Professor Fels says significant variations in pricing between locations also reflect a range of other factors such as risks of natural perils.