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Monday, 26 November 1973
Page: 3797

Mr JACOBI (HAWKER, SOUTH AUSTRALIA) - I address my question to the Treasurer. It deals with reinsurance. Is the Minister aware that for 1971-72 non-resident direct insurance premiums and overseas reinsurance premiums reached a record high? As a large proportion of reinsurance business transacted in this country is eventually placed overseas, therefore, to reduce the dominance of overseas insurers in the Australian market and to cut the outflow of funds, I ask the Treasurer: Will the Government take steps to establish an Australian reinsurance corporation to compete on a commercial basis with overseas interests?

Mr CREAN (MELBOURNE PORTS, VICTORIA) (Treasurer) - No official statistics are currently available on the amount of reinsurance business placed overseas by Australian direct insurers. However, when the Insurance Act of 1973 becomes fully effective, insurance companies will be obliged to submit regular statistical returns which will indicate, among other things, the amount of insurance placed outside Australia. When that information becomes available the Government will be able to assess more accurately the nature and the amount of reinsurance being placed outside Australia. This information will also permit consideration of the desirability of the Government's establishing an Australian reinsurance corporation to compete on a commercial basis with overseas interests. However, it should be pointed out that the placement of reinsurance business overseas can reflect in part the need for insurers to spread their risks as widely as possible. This applies particularly to large risks in which access to international insurance markets is often essential. Nevertheless, I would suggest that Australian insurers could have been much more ambitious in the past and I hope that they will take the lead in the future.

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