Home / Daily / Senators call out 'unacceptable' insurance crisis in north
29 April 2021
A Senate-appointed Select Committee has described as “unacceptable” catastrophe-prone northern Australia’s deteriorating insurance affordability crisis, warning “inaction” to adopt mitigation measures as proposed by multiple inquiries cannot go on indefinitely.
The Select Committee recommends the Federal Government prioritises its response and consideration of proposals contained in the Australian Competition and Consumer Commission’s (ACCC) final report into the issue.
It is one of 29 recommendations the Select Committee made in its final report on the effectiveness of the Government’s Northern Australia agenda. The agenda looks at ways to grow the northern region’s economy over the next two decades.
The ACCC final report released in December called for, among other things, large-scale mitigation projects to alleviate flooding risk. It also recommended property-level improvement works to address cyclone threats.
The Select Committee in the final report devoted an entire chapter to insurance, outlining submissions and views it has received from the Insurance Council of Australia (ICA), ACCC and other stakeholders on the long-running affordability issue.
It says that apart from the ACCC’s final report, mitigation recommendations have also been made by earlier inquiries such as the Northern Australia Insurance Premiums Taskforce.
But the Federal Government has so far not taken up the calls for increased mitigation investments.
“While there have been many reviews into this area, evidence provided to the committee clearly indicates that the insurance situation in northern Australia is worsening and that it is becoming no longer tenable for individuals, businesses and even local councils to remain insured,” the Select Committee says.
“This is an unacceptable situation and one that requires immediate action from the Federal Government, especially in the area of mitigation.”
According to the Select Committee, the ICA has provided a priority list of mitigation projects to the Federal Government for consideration, which the peak body says could reduce premium pressure.
However, none of these projects have been funded as yet, the Select Committee says.
“The committee is concerned about the Australian Government's inaction on the issue of affordable and available insurance and the devastating impact this is having on individuals, households, businesses and the development of northern Australia,” it says in the report.
“This probably is likely to get worse, with climate change predicted to increase the severity of natural disasters in northern Australia in the years ahead.”
Click here for the report.