Suncorp says action must be taken now to mitigate the impact of natural disasters in northern Australia, and waiting until the Australian Competition and Consumer Commission (ACCC) completes its inquiry would be a mistake.

The Brisbane-based insurer says in its submission to the ACCC’s interim report, published in December, that the only way to sustainably reduce premiums in the north is to “reduce the physical impact of natural disasters”.

“Action by governments, communities and insurers must be taken now to address the increasing risk and impacts of natural disasters, and this should not wait until after the ACCC’s inquiry is complete,” it said.

“Suncorp, alongside our global reinsurers, knows that weather events are today more volatile and severe, and that flooding is becoming an increasing risk in the region.”

The ACCC inquiry final report is not due until November next year. Its interim report made 15 recommendations, including a call to extend the ban on conflicted remuneration to insurance brokers and another to abolish stamp duty on insurance.

As reported yesterday by insuranceNEWS.com.au, the Insurance Council of Australia’s submission says it is “open to reforms” to ensure commissions are not excessive.

Suncorp notes that broker remuneration was addressed by the Hayne royal commission, which recommended a further review, and comments that “improvements should be made to the transparency”.

“By and large consumers (~90%) purchase home and motor insurance directly from insurers. However, brokers and other third parties, such as strata managers, do play a valuable role with their clients, particularly when consumers are time-poor, have unique needs or are seeking advice to bundle their assets.

“Suncorp supports efforts that will increase transparency of the payments received by intermediaries in providing these services, as this will also improve consumer understanding of the actual cost of their insurance.”

Suncorp agrees the “tax burden” on insurance in northern Australia “should be reduced”.

“Those living in northern Australia are paying significantly more due to the ‘double tax’ on home insurance.

“Simply, the higher the premium, the more tax they must pay. In addition to the proposal to remove stamp duty, GST should also be removed on home insurance products to improve insurance affordability.

“In the absence of removing these taxes, governments should redirect this revenue to mitigation efforts in the region.”

Click here to read the full submission.