Governments wanting to provide immediate relief to consumers battling expensive premiums in cyclone-prone regions of Australia should look at subsidies that can be clearly targeted, the Australian Competition and Consumer Commission (ACCC) says.

“If governments want to intervene, they should consider doing so through direct subsidies based on both premium level and income eligibility requirements, rather than government reinsurance pools or other measures,” the ACCC Northern Australia Insurance Inquiry final report says.

The ACCC, which also looked at and rejected a reinsurance pool in the inquiry’s second interim report, says subsidies have greater potential to work in a targeted way to relieve some of the acute affordability and cost of living pressures.

The final report, released shortly after Christmas, makes 38 recommendations, including 11 new proposals and 27 put forward over the course of the three-year inquiry.

The ACCC reiterates its call for a ban on broker “conflicted remuneration” and says it will be pursuing the issue through a Government review, recommended by the Hayne royal commission, that will report back next year.

The report again presses for the abolition of state stamp duty on home, contents and strata insurance products, or redirection of revenues towards mitigation works, and also affirms its call for the Government to look at a national home insurance comparison website.

While the report will not receive blanket agreement from the industry, new recommendations to improve building codes and planning processes have been supported by the Insurance Council of Australia.

“The insurance industry is already working with resilience agencies, scientists, local government and the building sector to develop above code standards for homes and commercial properties,” CEO Andrew Hall said.

ACCC Deputy Chairman Delia Rickard says there are real reasons for more expensive premiums in northern Australia, but the region’s insurance markets could work better for consumers.

The report’s proposals are grouped around the themes of making it easier to search for and compare insurance products; choosing the right amount of cover; dealing with conflicts of interest; addressing immediate affordability concerns; improving consumers’ rights; and reducing risk and building better.

“Many of our recommendations, if adopted more broadly, could also benefit consumers and insurance markets across Australia,” Ms Rickard said.

See ANALYSIS.