20 March 2017

New survey to assess risk and North Queensland insurance premiums

Researchers at James Cook University have launched a project aimed at investigating risk and insurance in the Cairns Northern Beaches area. 

Led by Dr Nick Osbaldiston at the JCU Cairns Campus, the project "aims to investigate the multiple risks that those living on the coastline of Tropical North Queensland face and also how residents mitigate these through insurance."

It will also explore how rising North Queensland insurance premiums have impacted the ability of residents to insure property - a subject of ongoing debate since the Northern Australia Insurance Premium Taskforce found that premiums had been rising rapidly in parts of North Queensland exposed to cyclone risk.

Insurance affordability still a hot topic in Far North Queensland

In recent years some parts of northern Australia (most notably northern Queensland and north Western north queensland insurance premiumsAustralia) experienced an increase in premiums over a short period of time. The reason for this, according to the government's Taskforce, is that "insurers are now increasingly pricing premiums to align more closely with the risk of dmamage to (and therefore claims by) individual properties." 

There is little empirical evidence to substantiate claims of underinsurance, market failure or disproportionately high premiums in North Queensland, but concerns over insurance affordability remain a topic of public debate.

Earlier this month the Federal Government was called on by a member of parliament to address the concerns of Far North Queensland residents and make a "critically overdue" response to the Taskforce's findings in 2015. 

A chance to have your say

As part of the JCU research project, residents of Cairns' northern beaches are invited to participate in a survey which Dr Osbaldiston, speaking to The Cairns Post, hopes will uncover whether the cause of premium rate increases are being communicated effectively to the community:

"One of the questions we want to ask is if people feel like we're getting a raw deal." 

Ashley McCulloch of Gallagher, North Queensland says that helping the community to understand the cause of rate increases is important. 

"There's always going to be concern about affordability, that's a given in any state" says Ashley.

"But what people don't realise is that premiums here are being set at a sustainable rate. We can't compare ourselves to cities like Brisbane or Sydney which have much larger populations and larger premium pools that can support their exposure to natural diaster risk." 

"Insurers have to adjust their practices and their rates in order to remain financially sound and able to support their clients when they do have a claim. That's just the price we pay to live in paradise."

"I hope JCU's project will help people better understand what's going on in the market. As a broker, it's my job to make sure my clients are informed and aware of what's happening with their insurance, and to help them mitigate their risks in a comprehensive and sustainable way. We should be working together as a community to develop a better understanding of risks and how to minimise them."

The survey will also address local's understanding of the risks they face, what new residents understand about their risk exposures and insurance issues, and how much trust the community is placing in the insurance industry. 

Above all the survey gives locals the opportunity to share their experiences with insurance and participate in a research project that will shed new light on how insurance affordability is impacting their community.

Contact your local Gallagher   branch in North Queensland