General insurers ‘tax collectors’
General insurers have become de facto tax collectors for both state and federal governments, according to Zurich Australia CEO David Smith.
He told a media briefing last week that underinsurance is escalating and is especially prevalent among small and medium businesses (SMEs).
Governments impose a raft of taxes on insurance premiums that typically add around a third of the total cost of the premium, Mr Smith said. That deters businesses from purchasing adequate insurance protection.
“It is an imperative that small business is able to access affordable insurance to protect their interests should a catastrophe occur,” he said. “Loading insurance premiums with punitive government taxes exacerbates the chronic level of underinsurance across the SME sector.”
Mr Smith has called on governments to introduce tax reform aimed at removing the hidden costs of insurance, a move he says will “significantly help in reducing non-insurance and underinsurance”.
ICA research shows 26% of SMEs do not have any form of general insurance, rising to 40% for sole traders.
He told a media briefing last week that underinsurance is escalating and is especially prevalent among small and medium businesses (SMEs).
Governments impose a raft of taxes on insurance premiums that typically add around a third of the total cost of the premium, Mr Smith said. That deters businesses from purchasing adequate insurance protection.
“It is an imperative that small business is able to access affordable insurance to protect their interests should a catastrophe occur,” he said. “Loading insurance premiums with punitive government taxes exacerbates the chronic level of underinsurance across the SME sector.”
Mr Smith has called on governments to introduce tax reform aimed at removing the hidden costs of insurance, a move he says will “significantly help in reducing non-insurance and underinsurance”.
ICA research shows 26% of SMEs do not have any form of general insurance, rising to 40% for sole traders.