Friday, 17 February 2023

Shadow Minister for Northern Australia, Senator Susan McDonald, has called on Assistant Treasurer Stephen Jones to reject an ACCC report into Northern insurance relating to the $10 billion Reinsurance Pool because it only consulted insurers and not customers.

In response to questions at Senate Estimates in Canberra on Thursday, Senator McDonald heard the report only contained premium costs provided by 15 insurance companies but not their customers.

She asked the ACCC for more information on how the insurance companies’ figures were verified and report back before March 31.

The ACCC report – released in December – stated that the average premium in 2021-22 for residential building and contents insurance in Northern Australia was about $2370, compared to about $1350 for the rest of Australia.

Strata insurance was around $5740 in Northern Australia, almost double the premiums paid by the rest of Australia (around $2940).

The average premium for small-to-medium business building and contents insurance in 2021– 22 was around $3160 across Northern Australia, compared to around $1610 for the rest of Australia.

After the hearing, Senator McDonald said Mr Jones should reject the report until customers’ experiences could be collated, pointing out she had recently been contacted by one North Queensland small business which has been quoted $50,000 for cover.

“My office is contacted every day by businesses and homeowners being slugged with massive premium increases, and they are at their wits’ end,” she said.

“It beggars belief that the ACCC can just accept the word of insurers and not speak to the people affected.”

Senator McDonald welcomed news that Allianz and Sure Insurance had already signed up to the pool, and that more companies would join within months.

“At Estimates, we heard Allianz and Sure customers had already enjoyed reduced premiums, and the Australian Reinsurance Pool Corporation confirmed two more large insurers would join the pool by July 1 and six more would follow soon after,” she said.

“The more companies that sign up, the more premium reductions will be passed to ordinary Australians.”

The Townsville-based Senator took issue with a Labor Senator who used Estimates to express scepticism at the Reinsurance Pool’s impact on premiums.

“It’s very frustrating to have Labor trying to politicise this issue because it destroys consumer confidence when the effects on premiums have already been proven,” she said.

Senator McDonald reminded people to send their premium bills to the ACCC at so the body can obtain a true picture of how much Northern Australians pay for insurance.

The ACCC report can be found here.