The cost of living crisis brings a new urgency to addressing insurance prices in Northern Australia and high cyclone risk areas.
Released this week by the Australian Competition and Consumer Commission (ACCC), the first Insurance Monitoring Report re-confirms the significant impact insurance affordability is having on households and businesses in those parts of the country.
The Report, which covers 2021-2022, found residential building and contents insurance in Northern Australia featured an average premium of around $2,370 – or more than $1,000 above the national average.
For businesses, the average premium for combined building and contents insurance was almost double that across the rest of Australia, coming in at around $3,160.
Similarly, the average premium for Strata insurance in Northern Australia was nearly double the national average.
Shadow Assistant Minister for Competition, Charities and Treasury Senator Dean Smith said the Report also confirmed premiums were rising far more rapidly in Northern Australia.
“Insurance access and affordability in the North and other high cyclone risk areas is not a new problem,” Senator Smith said.
“It has been raised repeatedly as a major concern by residents and business operators, including on my own regular visits to impacted areas in WA’s Midwest and North, which is why the previous Coalition Government took the action it did earlier this year.
“But these already high costs, rising more rapidly than in the rest of Australia, take on a new significance as the cost of living crisis grows.
“The Albanese Government’s failure to provide adequate support to help communities through this challenging economic period makes things worse still.”
The Report forms part of the ACCC’s tracking of insurance prices, costs and associated profits in Northern Australia and high cyclone risk areas.
It aims to assess the impact of the Cyclone and Cyclone-Related Flood Damage Reinsurance Pool, which was established in early 2022 and commenced in July.
Echoing comments by ACCC Commissioner Mr Peter Crone, Senator Smith said the Report sets a valuable baseline from which to monitor the Reinsurance Pool’s performance.
“While we await insurers joining the Pool, and to judge its effectiveness, I call on the Albanese Government to step up and do all it can to aid affected communities.
“In the meantime, that includes a fit for purpose cost of living plan.”