Should Queensland's 'cyclone alley' have its own insurer?
SUNCORP has reignited warnings against setting up a government-backed cyclone insurer for North Queensland.
The Federal Government in March last year seemed to have killed off the notion of establishing such an insurer, noting a taskforce report had highlighted "significant financial risk" associated with such an insurance outfit.
But the government never delivered on a final report by June last year, as intended. Financial Services Minister Kelly O'Dwyer's office in March this year told The Courier-Mail the Government was "still considering the findings of the taskforce".
Insurance industry sources have been concerned the Turnbull Government feared a backlash from some North Queensland Coalition parliamentarians for opposing the scheme, and now North Queensland MP Warren Entsch has been quoted as saying he is confident of Prime Minister Malcolm Turnbull supporting a mutual insurer.
Mr Entsch and Mr Turnbull were unavailable for comment on Monday.
Shareholder-owned Suncorp on Monday argued a mutual insurer backed by government was not in the national interest. Mitigation and building stronger homes were better options, Suncorp argued.
The taskforce report last year was spurred amid high insurance costs for households in North Queensland. The report's first recommendation was for mitigation.
It said a reinsurance pool, used to protect insurers in major disasters, was more feasible than a mutual insurer, but warned a partially Government-backed scheme in either model would be needed to reduce premiums.
A partially funded scheme had a 10 per cent to 20 per cent chance of costing the Government more than $2 billion, it said. There was a 5 per cent to 10 per cent chance of the cost being more than $5 billion, it said.
Suncorp and the Insurance Council of Australia also lobbied against the establishment of cyclone reinsurance pools, while rival Allianz spoke in favour of such as pool.