The Insurance Council of Australia (ICA) has criticised the inquiry into northern Australia’s insurance affordability problem – saying it’s revisiting “flawed ideas” and failing to tackle the underlying issues.

Last week the Australian Competition and Consumer Commission (ACCC) published its latest report on the issue, nailing down some previously draft recommendations to make 28 in total.

And while the insurance industry welcomes some – such as removal of insurance stamp duty – others, including the banning of broker commissions and the establishment of a compulsory home insurance comparison website, provoke indignation.

Beyond the recommendations, the report also outlines further consultation on issues such as reinsurance pools, mutuals and direct government subsidies.

ICA says these options have been considered by previous inquiries and found to be “unviable and too expensive”, and the industry is “disappointed” to see the ACCC examining them again.

It says the comparison website proposal will not solve the affordability issue.

“The insurance industry would have preferred the ACCC offer practical recommendations that address the key drivers of pricing and availability of insurance in northern Australia – the high risk and impact of natural disasters (in particular cyclones and floods), high costs of materials and trades, inadequate building controls and poor-quality building stock.”

ICA last week released updated figures for the Townsville flooding catastrophe, which took place six months ago.

Almost 30,000 claims have been received, with estimated losses of $1.24 billion.

About 60% of claims have been closed and insurers have already paid out more than $521 million in repairs, rebuilding works, replacement items, services, business interruption, emergency accommodation and settlements.

ICA says 1.5% of claims – about 450 – have been denied by insurers because the policy held by the customer did not cover the loss.

See ANALYSIS.