Mayor backs insurance premium fight

TOWNSVILLE Mayor Jenny Hill has backed calls for government intervention in the insurance market in North Queensland, saying the industry's treatment of residential strata property owners is unfair.

She said government-backed schemes helped hold down premiums in areas such as health insurance and insurance for councils and could do the same for general building cover.

"I fully support the community trying to bring some realistic values back into insurance," Cr Hill said.

"I think it comes down to whether the State Government is prepared to bring back something like a Suncorp."

Suncorp was state-owned until its public listing with other entities in 1996.

Apartment owners in residential strata title properties in North Queensland have had average 300 per cent increases in insurance premiums since Cyclone Yasi tore through North Queensland in February 2011.

Residential home owners have been experiencing similar increases and some insurers have withdrawn from coastal areas at risk of storm surges.

Apart from having a government player enter the market, such as the Northern Territory Government's Territory Insurance Office, there has also been support for the Federal Government's Australian Reinsurance Pool Corporation, set up to provide re-insurance for terrorism, to be extended to storm events.

Cr Hill said the experience in health, which had government-backed Medicare, and in the council sphere, which had federal disaster relief arrangements and a council-funded insurance pool called Local Government Mutual, was that public sector involvement helped contain costs.

"If we didn't have something like Medicare in there keeping a check on premiums and (providing) competition, there would be a push toward higher premiums," she said.

"That's one of the reasons we have that sort of organisation in there, otherwise the market can dictate what goes on."

She said shareholders could reap returns of 10 to 20 per cent whereas earnings in a public scheme could be reinvested into areas such as flood mitigation.

Cr Hill said that premiums in the council's Local Government Mutual scheme backed by the Local Government Association of Queensland increased by just under 4 per cent to $2.5 million this year, although the council was budgeting for a more significant increase next year.

Source: http://www.townsvillebulletin.com.au/article/2013/02/14/375445_news.html

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