Tasmania election: Liberals plan state insurer TasInsure to cut the cost of living

The Liberals will set up a government-owned insurance company in a bid to reduce the cost of living for Tasmanian households and small businesses if re-elected at the July 19 state election.

Premier Jeremy Rockliff has promised to set up a government-owned insurance company if re-elected this month.

The Liberals will set up a government-owned insurance company in a bid to reduce the cost of living for Tasmanian households and small businesses if re-elected at the July 19 state election, Premier Jeremy Rockliff says.

The policy was welcomed by business groups but described as “harebrained” by the leading economist the government commissioned to examine its business operations.

The Rundle Government sold the former Tasmanian Government Insurance Office in 1993 for $45m to rein in the state’s $3bn debt.

Mr Rockliff said a new company TasInsure would be established to provide affordable insurance for home, contents, small business, community groups, events and regional insurance.

“It will be cheaper, fairer, ours,” he said.

“There is no doubt the national market has failed Tasmanians. Insurance is becoming unaffordable in too many parts of our state.

“For too long, Tasmanians have been paying sky-high premiums because they are paying mainland prices to cover mainland insurance claims, or worse, they are being told they simply can’t be covered.

“Tasmanians are rightly sick of having to pay higher premiums for mainland payouts and profits.

“That’s why we’re stepping in with a Tasmanian solution, one that puts people ahead of profits.”

TCCI CEO Michael Bailey, Launceston resident Carol Mackintosh and Premier Jeremy Rockliff. Picture: Elise Kaine

Mr Rockliff said Australian insurance firms raked in over $6bn in profits last year alone while premiums in Tasmania have risen by more than 35 per cent in just two years.

Economist Saul Eslake said the plan involved significant risk that even long-established private companies were struggling to manage.

He said the cost of the reinsurance every insurer needed was rising worldwide because of climate change.

“This is not a function of government,” he said.

“Every government in Australia sold its GIO in the 1990s — it’s not something governments should be doing.

“If you think governments should be operating cut-price insurance companies why not go into supermarket business, why not sell discount petrol?”

Tasmanian Chamber of Commerce and Industry CEO Michael Bailey said it was a clever move. It was also backed by the Tasmanian Small Business Council and the Tasmanian Hospitality Association.

“To have our own insurance firm that can provide a lower premium cost for Tasmanian businesses with the same coverage, using the balance sheet of MAIB is a really clever move and one that really does make our GBES work for Tasmanians,” Mr Bailey said.

“We know too many small businesses in Tasmania are under insuring or not insuring at all. They just can’t afford it, the price of insurance has gone through the roof.

“What this means is they can insure and they can make sure they are protected should the worst thing happen to their business.”

Labor leader Dean Winter said the plan was ”reckless” and “a desperate move” by a Premier under pressure.

“Do people really think that Jeremy Rockcliff is going to be able to run an insurance company better than existing insurance companies?

“This is a premier couldn’t even build a berth for our new ships.”

Originally published as Tasmania election: Liberals plan state insurer TasInsure to cut the cost of living