Tasmania’s TasInsure initiative has reached a new phase after the state government appointed the Royal Automobile Club of Tasmania (RACT) as its interim delivery partner on August 10 – a development that follows a significant redesign of the original policy, the appointment of a national insurance expert to review it, and a formal retreat from the plan to establish a state-owned underwriting competitor to private insurers.
For brokers, the story is not simply that a government has entered the insurance market. It is that a government tried to enter it one way, found that approach unworkable on expert advice, and has now landed on a partnership model with what may become Australia’s last remaining independent mutual club insurer to tackle hard-to-place sectors and community resilience. The final shape of TasInsure remains unresolved.
TasInsure was a centrepiece of Premier Jeremy Rockliff’s Liberal government at the 2025 Tasmanian state election, originally proposed as a state-backed entity that would underwrite home, contents, and small business policies in direct competition with private insurers. Following public consultation that drew 18 submissions, the government confirmed in May 2026 that TasInsure would instead operate as a Tasmanian government-owned, not-for-profit statutory authority with a broad mandate to oversee and support the state’s insurance ecosystem.
That pivot followed a high-level strategic assessment by financial services and insurance specialist John Trowbridge OAM, whom the government engaged to advise on TasInsure’s development and framework. Trowbridge served as an Australian Prudential Regulation Authority (APRA) member with responsibility for insurance from 2006 to 2010 and chaired the Australian government’s natural disaster insurance review following the 2011 floods. His advisory work for TasInsure covered the scheme’s development and structure, as well as potential product classes, including whether workers’ compensation would be brought within scope. The government’s revised mandate for TasInsure is to “step in where the market fails” and focus on long-term affordability by addressing risk, prevention, resilience, and increasing competition. The August 10 appointment of RACT as interim partner is the latest step in implementing that revised approach.
Read next: NIBA backs TasInsure plan
The partnership will prioritise delivering insurance for hard-to-place sectors, including tourism, hospitality, and events. These sectors have faced constrained insurer appetite nationally, not only in Tasmania, following pandemic-era losses and elevated catastrophe frequency. A government-backed framework that explicitly targets them – with an insurer as delivery partner – is a direct market intervention in segments where standard placement channels have become unreliable. Premier Rockliff framed the rationale plainly: “The rising cost of insurance continues to place increasing pressure on the budgets of Tasmanian households and businesses. While the insurance market is complex, our government has taken on the challenge because Tasmanians deserve fairer, more affordable insurance options.”
RACT’s appointment is not incidental to its structure. IAG completed its $855 million acquisition of RACQ Insurance in Queensland in September 2025, and Allianz acquired RAA’s general insurance business in South Australia for $642 million in July 2025. If a pending IAG acquisition of RAC Insurance in Western Australia proceeds, RACT would be the only member-owned motoring club in Australia still retaining its own general insurance underwriting business.
As a mutual organisation, RACT is constitutionally required to put members first and purpose before profit, basing decisions on member needs rather than shareholder returns – covering $50 billion in Tasmanian assets. That structure enables a government partnership directed at reducing underlying risk and cost, rather than at maximising underwriting returns, in a way a listed insurer accountable to shareholders would find structurally harder to replicate.
The MoU also encompasses a broader resilience agenda alongside the hard-to-place focus. RACT group CEO Mark Mugnaioni (pictured centre) cited a 4-to-1 return on resilience spending – consistent with research from the United Nations Office for Disaster Risk Reduction (UNDRR), which has found every US$1 invested in making infrastructure resilient saves US$4 in avoided losses and disruptions.
Mugnaioni pointed to the Launceston flood levee as a local proof of concept: built for $58 million, it now saves $15 million in insurance premiums every year. For brokers placing property risks in flood-affected Tasmanian markets, that arithmetic is relevant at renewal – where government-funded mitigation is operational, risk profiles may shift.
The MoU covers an initial three-month period, after which the government intends to formalise a five-year partnership. Early priorities include practical risk management support for small businesses, property-level risk reduction planning, and coordination of mitigation investment across government. Performance metrics for the partnership have not been publicly disclosed.
The context driving TasInsure’s evolution is national. The Actuaries Institute’s Home Insurance Affordability and Home Loans at Risk report finds that 1.6 million Australian households are experiencing home insurance affordability stress – up 30% from the previous year. KPMG’s General Insurance Insights 2026 records that insured losses from extreme weather averaged $4.5 billion annually between 2019 and 2024, a 67% increase from the preceding five-year period, and identifies collaborative investment in long-term risk mitigation as the necessary market response.
TasInsure is one state’s attempt to operationalise that logic – revised, expert-tested, and now in interim delivery. Whether the RACT partnership produces a replicable model for hard-to-place sectors is the question brokers nationally should be tracking.
