Suncorp has welcomed the ACCC Northern Australia Insurance Inquiry’s finding that heavy losses, and high and rising costs, have played a big part in higher insurance premiums in northern Australia.
Suncorp CEO Insurance Gary Dransfield said the interim report’s finding echoes a long series of inquiries into insurance in the region and reinforces the need for governments to act to reduce the risks.
However, he said caution may be needed on several recommendations.
“Suncorp needs time to consider any unintended consequences for consumers as well the availability and sustainability of insurance – as some are already being examined by other inquiries,” Mr Dransfield said.
But importantly, the ACCC has confirmed mitigation of natural hazard risk is an important component of efforts to reduce insurance premiums, and it requires a collaborative approach between government, industry and individuals to solve.Gary Dransfield, Suncorp CEO Insurance
"Residents in northern Australia need to see the benefits of government action in protecting their homes and communities.
“Mitigation is the best way for residents in the cyclone-prone area to protect themselves, their loved ones and their homes against these events. At the same time, a stronger home means a lower risk and therefore cheaper insurance.
“Around 97 per cent of government disaster funding is spent after a disaster – just 3 per cent is spent on mitigation to help avoid the impact in the first place. This leaves northern Australia dangerously exposed to cyclones and other extreme weather events, and the ACCC’s findings confirm this is what drives up the cost of insurance.
“People want to make their homes stronger to avoid damage and to save on insurance, they just need a helping hand to make the investment in mitigation. The Queensland Government’s Household Resilience Program for cyclone retrofits is a good start, but funding is limited and residents and communities need more.
“Already more than 40,000 Suncorp customers have received insurance premium reductions of up to 20 per cent for making their homes more cyclone resilient, but many more need help to invest,” Mr Dransfield said.
“Some who are already receiving reductions for resilience may want to do more if given the right incentive.”
Suncorp also supports the ACCC’s calls for the removal of stamp duty on home, contents and strata insurance.
“The recommendation to remove stamp duty on insurance policies is a positive step because it currently exacerbates affordability pressures,” Mr Dransfield said.
“Northern Australians are currently paying a double tax on insurance and we don’t believe that’s fair.”
The ACCC said more needs to be done to make insurance more transparent and easier to understand.
“This is a really complex problem with no simple solution, however we are committed to showing the value of insurance, and what this means for customers and the wider communities across northern Australia.
“We will continue to work through the detail of the report as well as cooperating with the ACCC throughout its three-year inquiry, however we know what the problem is. We need action now to fund more mitigation, as these communities experience yet another storm season,” Mr Dransfield said.