The opposition leader, Peter Dutton, has threatened to break up Australia’s big insurance firms.
“As we’ve done with the supermarkets, where we have threatened divestment, if consumers are being ripped off, similarly in the insurance market, we will intervene,” Dutton said in an interview with Sky News on Sunday.
He suggested the Coalition’s divestiture policy, aimed more at big supermarkets and hardware stores, would only be used as a last resort.
Insurance premiums, including for home and motor, have continued to rise sharply, particularly in areas threatened by natural perils. In recent years, many covers have risen by at least 15% annually, some have doubled in price.
The recent flooding in north Queensland has, once again, highlighted these insurance affordability concerns.
As the country waits for a federal election announcement, some surveys show that cost of living concerns dominate. More than 70% of respondents to an Australian Financial Review/Freshwater Strategy poll ranked it as their top issue.
However, the ABS also noted “an easing in growth for Insurance premiums” during the last quarter.
In comments quoted by The Guardian newspaper, Andrew Hall, CEO of the Insurance Council of Australia (ICA), said insurers were “very aware” of the inflation impacts on premiums and the rising cost of weather events. He said Australia had a “very competitive” insurance market.
“The only sustainable way to address insurance affordability is to reduce or remove risks,” said Hall. “This means investing in resilience-enhancing infrastructure, strengthening building stock and reforming land use planning, and requires significant investment from and collaboration with governments.”
Hall said premiums could be reduced by up to 30% by abolishing state insurance taxes.
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