Sure Delivers Blueprint To Tackle The North’s Insurance Affordability Crisis

Apr 9

The range of Sure Insurance initiatives to encourage greater competition and to drive down premium prices include a scheme to equip insurers with a tax-effective catastrophe capability – The Catastrophe Event Provision (CEP).

Managing Director of Sure Insurance, Bradley Heath said it’s time the Federal Government recognised those insurers with ‘skin in the game’ and to encourage and back greater market participation and price competition.

“We all know in a ‘good’ year insurers will make a profit and in a ‘bad’ year, they will not.”

“This is when the Catastrophe Event Provision comes into effect and is designed to help prevent or reduce insurance premium increase shocks.”

“If market entrants and existing insurers were allowed to put away some of the profits up to a legislated limit, on a tax-effective basis, then in the bad years they can utilise that retained profit to enable a smoothing of results which should stop or reduce large-scale premium increases when losses do occur,” Mr Heath said.

“The CEP proposal isn’t a free kick for insurers because over the longer term cycle it doesn’t cost the Australian taxpayers anything. It’s very similar to other industry arrangements such as the Farm Management Deposit Scheme that has been around for many years and also other such insurance schemes around the world”.

“We would like to see government at all levels offer more incentives towards upgrading homes and units to higher standards – a practice already recognised and rewarded by Sure Insurance through significant household premium discounts.”

“It’s widely known that some insurers will refuse to cover areas of north and Far North Queensland. Some of these are major international insurance companies and they are relying on a government funded reinsurance pool before they re-enter these markets, and we don’t think that’s fair” he said.

“What we can’t understand is, that from a standing start two years ago, Sure has proven that market competition drives down prices – so why is the government looking to subsidise multinational companies, instead of creating incentives to boost competition?”

“After almost two years of market operations our specialist pricing expertise has delivered average annual household insurance premium savings of over $1,400 per customer across central, north and Far North Queensland.”

“While some are calling for the government and taxpayers to foot the bill, Sure Insurance’s entry into the regional Queensland market is a clear example of increased market competition working to effectively tackle the affordability ‘crisis’ – while at the same time delivering a solution to the region’s no-insurance issue”.

“We are convinced additional insurance market entrants will further reduce the cost of premiums and assist regional householders across vulnerable communities to access essential household and residential strata insurance cover,” Mr Heath said.

Further information contact Mike Sopinski on 0421 052 598

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