The Greater Whitsunday Region and its people are extremely resilient having dealt with numerous natural disasters
and economic challenges over the last decade. The regions prosperity and its significant contribution to the national
economy relies on attracting and retaining a skilled and committed workforce and their families. The stability and
viability of not just the broader Greater Whitsunday community but also the business economy is being undermined
by the impacts of ever increasing Insurance costs and in some cases the complete unaffordability of insurance cover.
The disparity of insurance costs and coverage is highlighted by the Insurance Quote Comparisons for a typical
median residential property in Mackay compared to other metropolitan and regional centres in SE Qld as follows: -
Property Details;
Building
House - Built 1975
Construction
Brick, Tile
Security
Keylocks & or Security Screens
Deadlocks on Doors / No Alarm
Building Sum Insured
$400,000
Contents Sum Insured
$100,000
Flood Cover
Automatically Included
Mackay
Ipswich
Brisbane
River
Logan
Insurance Company
Quote
Annual Cost
Annual Cost
Annual Cost
Annual Cost
Allianz
$450 Excess
$10,679.85
$2,100.00
$3,260.00
$2,420.00
CGU
$500 Excess
$4,542.48
$3,420.00
$2,000.00
$2,530.00
Vero
$500 Excess
$7,916.37
$2,390.00
$2,610.00
$2,410.00
QBE
$500 Excess
$6,999.50
Insurance Type Address Amount of Cover Excess Premium Insurer
Difference $
Difference %
Contents at a Rented Dwelling Rosella 4740 71,700.00$ 550.00$ $1,248.15 CGU
Contents at a Rented Dwelling Yeronga 4104 71,700.00$ 550.00$ $901.40 CGU 346.75$ 38.5%
Building & Contents - Owner Occ Andergrove 4740 Building $330,800- 1,000.00$ $4,682.48 VERO
Contents $ 66,200-
Building & Contents - Owner Occ Everton Park 4053 Building $330,800- 1,000.00$ $1,767.42 VERO 2,915.06$ 164.9%
Contents $ 66,200-
Landlords Building & Contents & Loss of Rent
Walkerston 4751 Building $380,000- 1,000.00$ $1,713.67 CGU
Contents $20,000-
Loss of Rent $19,000-
Landlords Building & Contents & Loss of Rent
Northgate 4013 Building $380,000- 1,000.00$ $820.93 CGU 892.74$ 108.7%
Contents $20,000-
Loss of Rent $19,000-
Building & Contents
Dolphin Heads 4740
Buildings $859,500- 2,500.00$ $5,768.41 CGU
Contents $100,000-
Building & Contents Hamilton 4007 Buildings $859,500- 2,500.00$ $2,256.78 CGU $3,511.63 155.6%
Contents $100,000-
Building & Contents - Strata - Duplex Buildings $500,000-
Contents $71,000-
62015.001.001.0194
The above data highlights that reinsurance options quoted are in some instances priced out of the market by the
Insurer to reduce exposure to the regional market. The differential comparison between a median price Andergrove
property in Mackay and an Everton Park property in Brisbane has increased from 84.6% to 164.9% in two years. The
high insurance cost impact on a median price dwelling in the mortgage belt in Mackay is directly impacting young
families and middle-income earners as well as significantly impacting pensioners with insurance equating to over
21% of total maximum pension rate for a single pensioner. This reinsurance practice is impacting those who can
least afford it and leading to under-insurance or non-insurance of homes.
The increased cost of insurance and changed insurance conditions not only impacts residential properties but also
commercial and major industrial sites.
The following table highlights the insurance premium hike for a local commercial marina operator: -
2013
2014
2015
2016
2017
Marina Installation
$92,480.77
$81,698.02
$81,698.02
$81,698.02
$356,287.10
The premium hike is a significant impost on the ongoing viability of the marina business.
The Operator is having difficulty securing ongoing insurance and/or appropriate coverage.
The Marina is an economic driver for Mackay and if forced to operate in a reduced capacity or close it will have a
significant regional economic impact in Mackay.
Major infrastructure and services providers like North Queensland Bulk Ports are also reporting insurance premium
rises by more than 300% and significant changes to insurance conditions.
Data from a 2015 Regional Development Australia Study on Insurance and Banking in the Pilbara shows comparable
costs with Mackay.
62015.001.001.0195
The study found that in Mackay insurance costs are high due to the impact of cyclone damage over the last decade.
They are five times higher in north Queensland than in Sydney and Melbourne for strata insurance and two-and-a-half
times higher for home insurance.
This information highlights that the frequency of cyclones and associated impacts is not much higher in Mackay than
Brisbane, however Mackay premiums are significantly higher.
Greater Whitsunday Alliance recently surveyed Greater Whitsunday residents to collect data on insurance impacts
across the region. The response to the survey was very positive with a broad cross section of 88 respondents from
across the region providing data. Residential property owner findings indicate:
• More than 60% of participants came from the Whitsunday region indicating real concerns about insurance
affordability in the future in the light of the recent Cyclone Debbie claims.
• From the survey of both residential and commercial property owners more than 25% of residential property
owners indicated that their insurance premiums had risen significantly over the last two years. Broadly,
indicating that insurance premiums are becoming increasingly unaffordable.
• 41% of those surveyed said their excess or conditions for insurance cover had changed in the last two years,
despite 60% never making a claim in the last five years.
Data collected from commercial property owners also reflects a steep increase in the cost of premiums over a brief
period. With 56% of those surveyed who own a commercial property indicating that their excess or conditions for
insurance had changed, making it difficult to secure adequate insurance cover. The change in conditions enforced by
insurers such as increased excess amounts in the event of a claim or offering only part cover is making it difficult for
commercial property owners to reinsure or secure adequate cover.
There is clear evidence to suggest that residents living in Northern Australia are being prejudiced by insurance
companies and that is impacting the entire community and in some cases causing economic hardship. Affordable
access to insurance for the residents of Northern Australia should be a priority of the Federal Government to
maintain working families and businesses in the regions; underpin regional economic development and truly align to
the goals of Northern Australia White Paper.
62015.001.001.0196
We urge the Federal Government to consider the following recommendations:
1. Consider legislating for fair and equitable insurance coverage for all Australians.
2. Consider linking the provision of insurance licences with insurance companies having a mandated
percentage of premiums and policy’s in Northern Australia to ensure all Australians have access to
affordable insurance.
3. Insurance premiums include a 9% stamp duty fee and 10% GST. These fees contribute significantly to the
overall insurance cost burden to many in Northern Australia. Relief from these taxes on insurance
premiums for Northern Australians could make insurance more affordable, increase the insurance pool
and reduce premiums overall. Most importantly, a reduction in these fees may provide an opportunity
for all Australians to insure their homes and businesses.
Greater Whitsunday Alliance and RDA MIW are committed to advocating for the insurance affordability and access in
the Greater Whitsunday region. We look forward to working with the Federal Government and the ACCC to identify
and deliver important regional outcomes for the Mackay-Isaac-Whitsunday region. If there are any question in
relation to this submission, please contact GW3 CEO – Garry Scanlan on 0409575243.
Yours Sincerely,
John Glanville – Chair
Greater Whitsunday Alliance Ltd.
“Regional Opportunity – Strong for Generations”
Graham Smith
Chair – RDA Mackay-Isaac-Whitsunday
62015.001.001.0197