Tasmanian Government Insurance Proposal Faces Industry Backlash
Tasmanian Government Insurance Proposal Faces Industry Backlash
2
The Tasmanian government's recent proposal to establish a state-run insurance entity has drawn significant criticism from key players in the insurance industry.
The plan, spearheaded by Premier Jeremy Rockliff, aims to expand the Motor Accidents Insurance Board into a broader service named TasInsure, offering products including home and contents insurance, small business coverage, and more.
The RACT, a major player in Tasmania's insurance sector, expressed considerable concern, labelling the initiative as a simplistic answer to complex problems.
RACT's CEO, Mark Mugnaioni, highlighted the essential need to address the underlying drivers of rising insurance costs, such as frequent natural disasters and increasing construction expenses, rather than implementing what he sees as quick fixes. He emphasised that the RACT, as a mutual owned by 220,000 members, prioritises the interest of its members over profits. Despite market pressures, RACT has managed to keep its home insurance costs lower than those of mainland insurers.
Premier Rockliff, facing an election amid the turmoil of a recent no-confidence motion, argues that a state insurer would curb the high premiums Tasmanians pay for mainland payouts and profits. However, his opposition dismissed the proposal as a poorly thought-out idea fraught with risks. Labor leader Dean Winter criticised the plan for potentially jeopardising the long-standing RACT without proper consultation.
Independent economist Saul Eslake was critically surprised by the proposal, questioning the wisdom of having a government entity compete with established private firms in the insurance space. Cameron Gill, manager at Steadfast Taswide Insurance Brokers, remarked on the industry's surprise by the announcement and urged for detailed discussions regarding the implications of such a model.
The proposal has sparked a debate on how best to address perceived market failures, especially in regional areas. While Premier Rockliff believes in the potential of a government-run insurer, industry experts like Gill suggest alternative solutions, such as lowering taxes on commercial premiums, could be more effective and less financially risky.
This unfolding scenario underscores the complexities of the Tasmanian insurance market and highlights the challenges in balancing government intervention against established market forces. As the election approaches, the industry awaits further developments and potential policy clarifications.
Australia's retail life insurance sector is facing significant challenges despite generating approximately $9.4 billion in annual premiums. Upon closer examination, it's evident that this industry is under strain. Growth is primarily driven by price increases rather than the addition of new clients, signalling concerns for long-term sustainability. New business growth hovers around 8-9% annually, not enough to adequately bolster the sector. - read more
The New South Wales government has issued a stark warning regarding potential financial consequences if proposed reforms to workplace mental injury laws are delayed further. As an upper house committee gathers to discuss these changes, Treasurer Daniel Mookhey highlights the urgency, stating that setbacks will result in increased premiums. - read more
An Australian travel insurance policyholder faced disappointment as the Australian Financial Complaints Authority (AFCA) denied their claim for reimbursement of costs incurred due to changing travel plans amid threats of a pilot strike. The traveller, who rearranged his flights from Sydney to Vancouver and subsequently to Toronto, had hoped his insurer, AIG Australia, would cover the $5,576 expenses for the rebooked flights and additional accommodation. - read more
Comprehensive insurance is a type of coverage that protects your trade business from various risks and unforeseen events. It typically includes an array of policies that cover different aspects of your business operations. - read more
Tradespeople in Australia rely heavily on their tools and equipment to get the job done. Whether you are a carpenter, electrician, plumber, or any other type of tradesperson, your tools are essential to your daily operations. - read more
Whether you're a carpenter, electrician, plumber, or any other type of tradesperson, your work is essential to keeping homes and businesses running smoothly. But have you ever thought about how important insurance is for your trade business? - read more
Dictionary
Elimination Period
noun
The time period between an injury and the receipt of benefit payments from an insurer, particularly in disability insurance.
