Flood
Flood

Floods to become case study for major insurance inquiry

A MAJOR inquiry into insurance in Northern Australia will investigate the aftermath of the Townsville floods.

Peak competition watchdog the Australian Competition and Consumer Commission has confirmed it will conduct a case study on the Townsville region as part of its ongoing Northern Australia insurance inquiry.

Mayor Jenny Hill said Townsville City Council had asked the ACCC to conduct a subregional study of the impact of the floods on insurance.

"We are already starting to see incredibly high premiums, we know that of last week we had 29,935 insurance claims submitted to the value of $1.24 billion," she said.

"And we're seeing ever increasing report of substantial increases in insurance premiums and the withdrawal of product from North Queensland, especially strata title.

"I think (the ACCC) will make recommendations, the question is whether or not the Federal Government has the kahunas to implement them."

Cr Hill said the inquiry had a little while to go and she "genuinely believed" using Townsville as a case study was really important.

The inquiry, which started in May 2017, released its first interim report in December last year.

A spokeswoman for the ACCC said the Townsville flood was one of "several detailed case studies" the inquiry was conducting of various subregions.

"We are conducting consumer research and are seeking more detailed information and data from insurers about premiums and claims in the Townsville region," she said.

"We expect to provide some findings in our second interim report due to the Treasurer on November 30, 2019."

The ACCC's first interim report found not only awere insurance premiums considerably higher in Northern Australia, they had risen at a faster rate - shooting up 130 per cent in real terms between 2008 and 2018, compared with an average 50 per cent rise in the rest of the country.

It said extreme weather in North Queensland and the cost of servicing this area were partly to blame - but that moves by insurers to assess risk and set premiums at an individual address level, rather than pool risks across regions, was also a factor.

Townsville Enterprise chief executive Patricia O'Callaghan said the cost and coverage of insurance had been a crippling issues for the Townsville community for decades and a resolution was needed.

"The February floods have heightened the issue and we welcome the ACCC looking at this event closely," she said.

"Our community should not be punished by insurers because of geographical location and the seasonal weather events our region regularly experiences.

"For many in our community, particularly businesses, insurance is an unaffordable. Coupled with the escalating costs of living, especially power prices, many North Queenslanders who can't afford insurance face constant uncertainty and unnecessary anxiety associated with potential impacts from weather events each summer."

Ms O'Callaghan said the cost of insurance in North Queensland was one of the key issues a delegation would be raising with the Federal Government during a trip to Canberra this month.

"Not only have we always paid more and had difficulty with coverage, but now many residents and businesses have been punished by hikes and in some cases not able to get the appropriate insurance at all," she said.



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