For home and contents insurance, the highest cost regions in Australia appear to be concentrated along the coast of north Queensland, far north Queensland, the Pilbara, Darwin and central Australia, according to preliminary observations on the northern Australia insurance market by the Australian Competition and Consumer Commission (ACCC).
Early analysis shows that while northern Australia makes up only 5% of the number of policies, it accounts for about 10% of premium revenue. Other key initial findings include:
- Between 2007-08 and 2016-17, average combined home and contents premiums, adjusted to account for changes in the sum insured, have increased by between 23% and 67% in northern Australia, compared to just 16% in the rest of Australia.
- In 2016-17, the average annual combined home and contents premium in northern Australia was A$2,000 ($1,522), which is about double the average for the rest of Australia. North Western Australia was the highest at A$2,700 per year. Strata insurance premiums in northern Australia are more than double premiums in the rest of Australia.
In July 2017, the ACCC commenced an inquiry into the supply of residential (home), contents and strata insurance in northern Australia, following direction from the Australian government.
“Our inquiry aims to address concerns about insurance availability and affordability, promote informed and competitive insurance markets, and make a difference for consumers in northern Australia,” ACCC Acting Chair Delia Rickard said.
“We have exercised our legislative powers to compel information from insurers about their products and gain unique insights that previous reviews of northern Australia insurance markets have been not been able to consider.”
The ACCC continues to analyse information received from insurers for its next report in November, which will make initial recommendations to government and industry on opportunities for change.