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Monday, 16 September 2019
Page: 3064

Mr CHRISTENSEN (Dawson) (19:30): It's become clear to me that the North Queensland insurance market has reached a crisis point. The canary in the coalmine is strata title and commercial hotel insurance, but the lack of competition in the market is already having a flow-on effect to home insurance. At present, we have strata titled apartments, commercial properties like hotels and tourism resorts and also community clubs not being able to obtain adequate insurance. It's not that it's just unaffordable; it's quite literally unobtainable. We are hearing that, in some cases, no Australian insurer is currently willing to offer new insurance policies to strata title apartments or commercial hotels in North Queensland. In fact, in many cases, the only insurer willing to offer any coverage is Lloyd's of London, and usually at unaffordable premiums. In some cases, there is no insurer willing to offer a policy at any price! This is where decline begins, because having no competition means that the insurance company can set the prices as high as they want, and the choice is to either pay up or shut down.

Airlie Apartments, located in the tourism hotspot of Airlie Beach, were paying a $38,000 premium per annum. They have since gone on to renew their policy, and the only quote they could find was with Lloyd's of London, as I talked about. Their annual premium is about $250,000—a 557 per cent increase on the last policy.

Gail Absolon, a body corporate administrator on Hamilton Island, is being quoted $200,000 for a 15-apartment complex with named cyclone excess of $100,000. And these aren't the summer holiday homes of the wealthy; this is a unit complex with 15 permanently-let, one-bedroom apartments that have a value of $275,000 to $300,000.

Hotel Metropole in Proserpine have seen their annual premiums skyrocket from $64,000 to $165,000 in one year, a 157 per cent increase. This is a hotel with 35 employees. It's facing an uphill struggle to keep the doors open, due not to poor business but to disproportionately high insurance costs.

The Whitsunday Sailing Club at Airlie Beach were refused a renewal of their policy by a previous insurer and were given a quote from Lloyd's of $120,000, a 242 per cent increase on last year. As a community club, they simply can't afford this sort of premium.

It doesn't stop at hotels and strata titles either. Ordinary households are also being severely affected by increasing premiums in the north. Petra and Bradley Mould, a young couple from Mackay, just last month rang to inform me of their struggle to find an insurer for their run-of-the-mill, average Queensland home. The cheapest policy they could find had a premium increase of 22½ per cent on last year's price. Mackay is a city that has not experienced any severe weather events in the last 12 months, and premiums have increased by 22½ per cent on last year. In fact, Petra and Bradley have had no claims, no flood damage and no cyclone damage for the last five years, and yet their premiums continue to go up by that enormous percentage.

The ACCC is currently assessing the matter of insurance prices in North Queensland. And it's definitely a matter that needs to be assessed.

The Minister for Finance, Senator Mathias Cormann, was visiting Townsville recently, a city that's still reeling in the wake of severe flooding earlier this year, and he suggested that the government would work with insurance companies, consult with relevant stakeholders, act on the ACCC's recommendations and 'do what we sensibly can'. So the government is committed to action.

I'd like to note, however, that we are at crisis point right now. We cannot allow premiums to increase exponentially and watch small businesses go broke or opt not to ensure. I fear that, with recent reports talking about places like Townsville being 'unprofitable', we will see a growing number of insurance companies exit the market.

The Greater Whitsunday Alliance has proposed to the ACCC a way forward by legislating for fair and equitable insurance coverage for all Australians. Their proposal is this:

Consider linking the provision of insurance licences with insurance companies having a mandated percentage of premiums and policy's in Northern Australia to ensure all Australians have access to affordable insurance.

This would push insurers back into the market and provide competition, which would then lead to affordability.

We need to set a minimum percentage of clientele in disaster-prone areas like North Queensland so that insurance companies must have those people and those businesses on their books. We can work with insurers to set the targets and ensure that they bring competitive insurance policy pricing back into these areas. These communities have already fallen victim to natural disasters. We now need to stop them being kicked while they're down. I would urge the insurance companies to do something before the government does. (Time expired)