In response to ongoing unaffordable home insurance premiums, the Southwest Regional Organisation of Councils (SWROC) is standing by its proposal for a “community protection mutual” aimed at helping local residents secure affordable cover. An ABC News report published today said a feasibility study by insurance broker JLT is “expected within weeks,” keeping the controversial idea firmly in play despite strong industry opposition.
The push comes after the Insurance Council of Australia (ICA) rejected the proposal in January. As Insurance Business reported at the time, ICA CEO Andrew Hall argued that any solution to natural catastrophe affordability must first address the underlying risk. But SWROC is unconvinced that the existing market or discussions with the industry will deliver relief quickly enough for communities already under severe pressure.
According to the ABC report, SWROC members are continuing to pursue the plan after multiple meetings with the ICA failed to produce a breakthrough. Balonne Mayor and SWROC chair Samantha O’Toole told the national broadcaster the discussions had effectively stalled.
“It’s a bit like banging your head against the wall,” she said.
That frustration is being driven by extraordinary premium escalation across parts of south-west Queensland, where flood exposure has pushed insurance costs to levels many residents say are impossible to absorb. ABC reported that some home insurance premiums have risen by as much as 500%. In the St George area, one resident said his cheapest home and contents quote came in at $23,000 a year, while the highest topped $60,000 — more than his annual salary.
For brokers, the story is another stark example of the affordability crisis deepening in high-risk regional markets, where availability, price and client retention pressures are becoming harder to manage with each renewal cycle.
The ABC report said SWROC — which comprises the Balonne, Murweh, Paroo, Bulloo, Maranoa and Quilpie shires — wants to establish a “community protection mutual” so residents and businesses can potentially bypass major insurers altogether. O’Toole said the purpose of the model would not be profit, but affordability and fairness for members.
That ambition reflects a growing sense among some local leaders that traditional insurer engagement has not translated into meaningful premium relief, even where mitigation measures such as levees have been built. ABC also reported that O’Toole accused the market of “a bit of price gouging,” while arguing there was no justification for some of the steep year-on-year premium jumps being seen in the region.
The proposed mutual is now with JLT, which has been engaged to prepare a proposal and feasibility study. If that study finds a viable path forward, the idea could move from protest concept to live policy debate — especially if councils can show meaningful community participation and some form of sustainable risk-sharing structure.
Still, significant questions remain. ABC cited internationally recognised insurance expert Professor Paula Jarzabkowski, who said the industry may need to be “reinvented” as climate and weather volatility intensify, but also warned that a local mutual on its own may struggle because it cannot diversify risk the way mainstream insurers do across geographies and perils.
That concern goes to the heart of the ICA’s January rejection. In IB's earlier report, Hall said mutuals are not inherently flawed — indeed, some of the world’s biggest insurers began that way — but warned that changing the ownership structure does not remove the cost of repeated flood exposure.
His position was that unless the underlying risk is reduced, the system still has to fund potentially catastrophic claims. That, he suggested, is especially problematic for a small, concentrated pool exposed to the same peril at the same time. For brokers, that logic feeds into familiar concerns around reinsurance, capital depth, governance and claims-paying ability after a major event.
Instead of a localised mutual, Hall pushed for broader risk pooling through a public-private partnership model, backed by serious mitigation spending. He pointed to the ICA’s call for a $30 billion flood defence fund over 10 years and argued that large-scale resilience investment is more likely to shift premium outcomes than fragmenting cover into smaller local pools.
Hall also tied premium pressure to sharply higher rebuilding costs, saying construction inflation has risen about 40% since 2020 and is often worse in regional Australia. That compounds the affordability problem by lifting replacement values and sums insured, even before flood risk is priced in.
For now, though, SWROC is not backing away. The councils appear to have concluded that waiting for the market to recalibrate is no longer enough for residents facing quotes they cannot pay and, in some cases, cover they cannot obtain at all.
If the JLT feasibility study lands as expected in coming weeks, brokers across Queensland will be watching closely. Whether the mutual proves workable or not, the proposal is sharpening an uncomfortable industry question: if high-risk communities cannot buy affordable insurance through the existing system, what fills the gap?
