Suncorp has warned the Federal Government against introducing a mutual insurer for cyclone-prone north Queensland, saying it would be ineffective and unfair to Australian taxpayers.

“A government mutual would merely paper over the cracks and not address the heart of the problem in the north – the high risk of cyclones devastating whole communities, flattening homes and neighbourhoods,” CEO Insurance Anthony Day said.

He says the only way to protect communities and ensure they remain vibrant and viable is by investing in mitigation, constructing stronger homes and properties and improving building codes in cyclone-prone areas.

Northern Queensland MP Warren Entsch is campaigning for the Federal Government to support an insurance mutual, arguing it would make insurance cover more available and affordable.

The Government is yet to respond to the Northern Australia Insurance Premiums Taskforce report, released in March last year.

But the Australian Financial Review reports the Department of Finance and Treasury is assessing a model submitted by Mr Entsch along with Regis Mutual Management and Willis Re, which was covered in the taskforce’s review.

The taskforce report was strongly against government intervention and recommended mitigation as the only way to reduce premiums on a sustainable basis.

“The Government should be willing to listen and act on the strong advice of its own inquiries,” Mr Day said.

The taskforce report says there would be no reduction in premiums if either a mutual or reinsurance pool were run along commercial lines, and any decline would come at a cost to the Government.

“The mutual could result in a complex claims experience,” the report says.