The Tasmanian Government has announced today that it is taking the next steps to establish TasInsure with the aim of lowering insurance costs for Tasmanians. But the move scraps a previous plan to establish a state owned general insurer. TasInsure is now proposed as a statutory body. The Insurance Council of Australia (ICA) has responded by insisting that the state's consumers and businesses already have access to a "strong, competitive insurance market."
"The Tasmanian Government is taking the next steps to deliver TasInsure — turning a clear election commitment into fairer, cheaper insurance for Tasmanians," insisted Premier Jeremy Rockliff (pictured right).
The Premier said the Government has engaged leading insurance expert John Trowbridge to develop the framework and confirmed TasInsure would be established as a Tasmanian Government-owned, not-for-profit statutory authority with a broad mandate to oversee and support the state's insurance ecosystem. Its remit, Rockliff said, is to tackle a "real and growing problem" — the rising cost of cover for small businesses, tourism operators, community groups and event organisers, the very segments where Tasmanian brokers have reported the sharpest placement difficulties.
"TasInsure will step in where the market fails and will focus on long-term affordability by addressing risk, prevention, resilience and increasing competition," Rockliff said. "Our Government is delivering a nation-leading solution to insurance and Tasmanians will reap the benefits."
That framing — a state body stepping in where the private market is said to be falling short sets up a defining policy fight for Tasmanian brokers and one the industry was quick to push back on.
"Sustainable affordability comes from tackling the underlying drivers of insurance costs, investing in resilience, removing unfair taxes on insurance, and modernising civil liability settings," said Andrew Hall (pictured left), the ICA's CEO.
While the ICA welcomed the Government's commitment to ongoing collaboration with insurers and reinsurers on risk reduction, data and affordability, it argued that the underlying drivers of higher insurance costs remain the cost of extreme weather risk, sharply rising building and repair costs, compensation payouts, and the burden of taxes and regulation — and that the most powerful of those levers are already sitting with the state.
The numbers the council put on the table sharpen that argument for brokers' commercial conversations. Removing stamp duty from insurance would save Tasmanian households $161 million this year alone, cutting the cost of home and contents insurance by 10%, while abolishing the Fire Services Levy would save businesses $110 million this financial year. Civil liability settings underpinning public liability and other business covers have not been comprehensively updated since the early 2000s, the ICA noted, feeding higher premiums for Tasmanian SMEs. Independent analysis cited by the council found $46 million invested in extreme weather risk reduction in the state would return $940 million in benefits by 2050.
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The council also flagged a structural question for brokers watching the rollout: the Government has signalled it may intervene in the market, but the ICA argues it is unclear how it will do so without establishing a standalone insurer, providing subsidies to target sectors, or mandating insurance pricing — all of which carry significant fiscal or market risks.
"Tasmania has a strong, competitive insurance market, with consumers and businesses across the State able to access cover from a wide range of providers," Hall said, warning that approaches that seek to artificially drive down prices without addressing underlying risks "have been proven to be costly for taxpayers and only drive up insurance prices."
The Government's next phase of work is broad. It includes progressing legislation to formally establish TasInsure as a Government-owned statutory not-for-profit; finalising its initial market interventions in hard-to-insure activities and risks; advancing Tasmania-specific risk data, mitigation and reinsurance mechanisms to tackle the structural drivers of premium increases; developing advisory, transparency and comparison functions to promote competition; and continuing engagement with insurers, brokers, community organisations and technical experts.
TasInsure, the Government said, will partner with insurers, brokers, reinsurers and other parts of the system to address gaps in availability and affordability, and is being built for the long-term benefit of Tasmanians.
The immediate path runs through Parliament. The Government must now draft and pass legislation to formally establish TasInsure as a statutory not-for-profit — a process that, based on comparable state authority establishments, typically runs six to twelve months from introduction to assent. Running in parallel, the Government will finalise TasInsure's initial market interventions, advance its risk-data and reinsurance work, and build out its advisory and comparison functions. The ICA said it stood ready to work in partnership on "real and sustainable solutions" so brokers can expect a public debate over stamp duty, the Fire Services Levy and civil liability reform to intensify well before TasInsure writes its first line of business.
