Damage caused by Cyclone Debbie has reinforced the case for a mutual insurer to reduce premiums to affordable levels, north Queensland-based MP Warren Entsch says.

The Northern Australia Insurance Premiums Taskforce report, released to the public early last year, favoured mitigation over government intervention.

But Mr Entsch says mitigation alone is not enough to reduce premiums in cyclone-prone areas, and the taskforce brushed over the potential for a mutual insurer to help cover the risk.

“Cyclone Debbie has reinforced the need for something different,” he told insuranceNEWS.com.au.

“There were a lot of businesses that were uninsured, either because they couldn’t afford it or the product wasn’t offered to them.”

Mr Entsch says the taskforce ignored a previous mutual proposal and he has submitted a revised version, involving Regis Mutual Management and Willis Re, for government consideration.

“We have put further information into the minister’s office,” he said. “We have answered questions and we have done other things there.”

The proposed mutual would cover cyclone risk only and could be funded through a compulsory levy, which Mr Entsch says could build funds used to reduce risk, rather than being distributed as profits.

“We are not looking for a government-owned entity,” he said. “The proposal has always been for the mutual to be owned by the policyholders.

“What we need is government support to have it established.”

Mr Entsch, whose Leichhardt electorate covers Far North Queensland, says he has discussed the proposal with Prime Minister Malcolm Turnbull and Financial Services Minister Kelly O’Dwyer.

The Insurance Council of Australia says mitigation is critical for reducing premiums in high-risk areas and has pressed the case in its submission to the federal budget, to be announced next Tuesday.

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