The insurance industry must recognise that government intervention over home and contents premiums in northern Australia is still a significant threat, Allianz says.

The Northern Australia Insurance Premiums Taskforce’s final report identifies mitigation as the only sustainable way to reduce unaffordable premiums.

The findings have delighted the bulk of the insurance industry, which is generally hostile to interventions such as a government mutual or reinsurance pool.

However, Allianz, which has previously been supportive of the reinsurance pool option, warns the problem will not go away.

It notes the report’s prediction that annual cyclone losses will average $285 million in future, compared with $115 million over the past 20 years.

“That is the figure that sticks out in neon lights and should send a shiver down the spines of north Queensland homeowners,” Allianz GM Corporate Affairs Nicholas Scofield told insuranceNEWS.com.au.

“If you are looking at a 150% increase in annual losses, you really have to ask yourself what the future holds.”

Mr Scofield fears that if affordability pressures worsen, calls for government intervention will strengthen, leading to “intensive regulation” of home insurance.

“The industry may have dodged a bullet this time, but the regulatory threat has not gone away. The report should not be an excuse for the industry to rest on its laurels.

“It is time to regroup and ask ourselves what the best form of intervention from an industry point of view would be. Mitigation may not be enough.

“The answer may not be a reinsurance pool, but I haven’t seen a better model.”

Queensland consumer advocate and adviser to the taskforce Margaret Shaw told insuranceNEWS.com.au she is disappointed with the report.

“On page 19 it quotes insurance companies as asking what the problem is,” she said. “It’s disgusting and callous when people are facing unaffordable premiums.

“The RACQ Insurance and Suncorp programs [which offer premium discounts for mitigation work] are gratefully received. I know someone who got a 16% reduction for work carried out on their roof. It’s a bit, but it’s not a lot.

“I don’t know what the answer is, but there has to be a solution out there.”

The Federal Government is considering the report and will release its response in “the coming months”. It has pledged to continue consulting with the insurance industry.