Coalition secrecy over cheap insurance

The federal government is refusing to release modelling that supports the premium reductions promised by the implementation of its $10bn northern Australia reinsurance pool.

Assistant Treasurer Michael Sukkar. Picture: NCA NewsWire / Gary Ramage

The federal government is refusing to release modelling that supports the premium reductions promised by the implementation of its $10bn northern Australia ­reinsurance pool.

After years of public lobbying, the reinsurance pool legislation was passed in the Senate this week and is set to come into effect in July in a bid to reduce premiums in the country’s cyclone-prone north. The government has said it will reduce home premiums by as much as 46 per cent, but has been unwilling to provide data showing how that will be achieved, despite calls from insurers and the ­opposition.

Labor’s attempt to introduce amendments to the legislation to have the government’s modelling revealed were voted down.

Assistant Treasurer Michael Sukkar has said the modelling was commercial-in-confidence and could not be publicly released.

“More than 880,000 residential, strata and small business property insurance policies in northern Australia are expected to be covered for the risk of cyclone and related flood damage through the establishment of the reinsurance pool,” he said.

“By delivering the reinsurance pool, the government expects to see reduced insurance premiums by up to $2.9bn for eligible household, strata and small business ­insurance policies.”

Opposition financial services spokesman Matt Thistlethwaite said the government needed to release the modelling to back up the claims.

“We’re not going to know if the thing’s going to work until we have those figures,” Mr Thistlethwaite said.

Insurance Council of Australia chief executive Andrew Hall has also called for the data to be released.

“The pool is scheduled to commence in just three months, so it’s vitally important that insurers and their customers are able to understand how and to what extent this will impact on premiums,” Mr Hall said.

“We look forward to the Australian Reinsurance Pool Corporation releasing that information as soon as possible.”

Townsville-based Nationals senator Susan McDonald defended the government’s position not to release the modelling.

“The modelling was provided by consultants, and the Government trusts that the figures have been reached based on exhaustive research and appropriate criteria,” Ms McDonald said.

“Some of the information was also provided on the condition of confidentiality so it’s entirely reasonable that we respect that, otherwise we risk not being given access to confidential information in future.

“It’s also important to note that – thanks to an amendment pushed by the North Queensland MPs – the Pool will be reviewed after just 12 months so we can track the actions of insurers and quantify the size of savings for consumers.”

Ms McDonald repeat her calls for the Queensland government to remove stamp duty on north Queensland insurance policies to help lower the cost of living.