Customer advocacy groups have scolded insurers over their efforts to address the “ongoing affordability crisis”, telling today’s flood inquiry hearing in Townsville that profits are being prioritised over consumers.

Townsville Lot Owners Group spokesperson Andrew Turnour told the federal parliamentary inquiry committee that insurers are “surviving off the dubious General Insurance Code of Practice, which forms trust contracts between the insurer and insured”.

Mr Turnour also criticised insurers over their continued calls for more disaster mitigation, saying this had become a “hoax” and the industry suffered from an accountability “cultural crisis”. 

“They use [mitigation] to tell us that everything else can solve the problem, but they don’t join the conversation in saying, ‘we will give you a discount,’ ” Mr Turnour said.

“Insurance companies treat [poor behaviour] as a badge of honour because they are getting more and more penalties.

“We would like to see an added emphasis placed on personal breaches of directors, such as having board members or CEOs forced to step down from their role, in addition to current financial penalties.

“That will change the cultural crisis in the insurance industry.”

Townsville Enterprise CEO Claudia Brumme-Smith told the hearing limited access to strata insurance and overall insurance affordability are “major barriers for growth”.

She says insurers should offer customers breakdowns of insurance costs and incentivise those who want to implement mitigation.

“Everything in terms of transparency of invoicing would be helpful to the public’s understanding and would allow business owners to split up which part of the insurance they are wanting to keep or get rid of,” she said.

Ms Brumme-Smith says progress must come from insurers and the government.

“We want to see long-term mitigation, because ultimately it is the only way we can see more affordable insurance with fewer events and less damage. The [Resilient Homes Program] would be great to see for our local councils and we would need to see support for small businesses and homeowners to implement the right things.”

Townsville Chamber of Commerce CEO Heidi Turner called on the government to consider introducing a baseline level of insurance and eliminating consumer insurance taxes.

“It shouldn’t be a situation where we have to reduce cover for insurance to be affordable,” she said. “Insurers have to offer coverage for all of Australia, not just the profitable parts.”