State insurance taxes should be abolished and excessive regulation wound back, QBE says in a submission to the financial system inquiry.

The insurer wants state taxes, duties and levies on insurance removed within three years, following recommendations for their abolition by previous inquiries, including the 2010 Henry taxation review.

QBE estimates the taxes add an average of $93 to each QBE policy, or $455 million last year for Australian consumers.

“Given the importance of affordability of insurance and the potential implications of non or underinsurance on the public purse, we believe it is time to… remove all these specific imposts on insurance.”

QBE suggests the Australian Prudential Regulation Authority’s mandate should require it to consider the impact of regulation on affordability, competition, efficiency and innovation.

It also wants better communication and collaboration between governments and the industry on affordability and accessibility issues.

“The natural disasters experienced in Australia over the past five years have shone a spotlight on the industry and also the complex issues of catastrophic natural peril risk in our country.

“It has raised unrealistic expectations of governments by consumers and unrealistic expectations of insurers by governments.”

QBE also calls for a wider streamlining of regulation.

It says current overlapping, duplicated and inconsistent arrangements create inefficiencies and inequities, while increasing the cost of doing business.

“It is not in Australia’s best interests for Australia to lead the pack on regulation,” it says. “If we create a regulatory regime that is more onerous than the rest of the world, this will impact on our international competitiveness in a highly contested global market for investment.”