The Tasmanian government has appointed financial services expert John Trowbridge to help establish its contentious state-owned insurer, TasInsure.
Premier Jeremy Rockliff announced the appointment as public consultation on the proposal closed, with 18 submissions now under review.
“Mr Trowbridge has hit the ground running, with work already underway on options for operating arrangements,” Rockliff said.
“It would be fair to say that John is the Michael Jordan of the Australian insurance industry and we’re very grateful to have his support.”
The premier pointed to Cyclone Koji in Queensland and Victorian bushfires as evidence Tasmania needs its own insurance solution.
“We know the insurance market is broken and this again highlights the need for a Tasmanian solution,” he said.
“For too long Tasmanians have been underinsured, unable to get insurance or paying the price of disasters on the mainland.”
TasInsure would expand the Motor Accidents Insurance Board (MAIB) to offer home, contents, small business and regional insurance products.
The government claims it would save households $250 a year and cut small business premiums by 20%.
But the proposal has faced sustained criticism since its announcement in the middle of last year.
The Insurance Council of Australia warned it “would put significant financial risk on to the public balance sheet while failing to do anything about the underlying causes of insurance pricing”.
Economist Saul Eslake labelled it a “hare-brained idea”, while critics have pointed to the absence of detailed financial modelling or a business case.
Shadow Treasurer Dean Winter this morning said he remains “deeply concerned” that the premier cannot produce “a shred of evidence to back up his claim that it will save Tasmanians $250 a year and somehow make groceries cheaper”.
“Despite today’s announcement, TasInsure still has no business case, no financial modelling, no risk analysis, no pricing structure and no explanation of how it will actually operate,” Winter said.
“Appointing a consultant and reviewing a handful of public submissions does not fix the fundamental problem – TasInsure remains a half-baked election thought bubble designed to mislead Tasmanians.”
Industry groups including the Tasmanian Hospitality Association and Chamber of Commerce have backed the proposal, citing soaring premiums that have forced some businesses to go without cover.
Trowbridge, who previously led national reviews into life insurance and financial advice, will advise on governance and operating models.
“The work of Mr Trowbridge will be vital in establishing TasInsure,” Rockliff said.
“He is a leading expert in insurance and I look forward to working alongside him.”
