The Tasmanian government has partnered with RACT to deliver its TasInsure insurance policy, signing a three-month memorandum of understanding in efforts to make cover cheaper and more accessible across the state.
Premier Jeremy Rockliff announced the deal this morning, saying insurance across Tasmania is “either way too high, unattainable or indeed people are underinsuring.”
The interim agreement will be used to finalise a longer-term partnership expected to run for five years, targeting households, businesses and community groups.
The memorandum describes TasInsure as a “government-owned, statutory not-for-profit entity” that will partner with insurers, brokers and reinsurers to address gaps in insurance availability and affordability.
RACT CEO Mark Mugnaioni said the organisations held their first steering committee meeting on Monday morning before the memorandum was even signed.
“We have 4 key priorities that we will be starting on immediately, including a forensic assessment of insurance policies that have significantly increased over the last few years,” he said.
The committee will meet fortnightly.
Those four early priorities include commissioning an independent expert to examine what is driving up premiums and developing risk management training and certification for small businesses and community groups.
It also includes creating property-level risk reduction plans for natural hazards and coordinating government mitigation investment across all levels.
Mugnaioni had previously criticised TasInsure when it was announced during the election campaign but said the approach had since shifted.
“Looking from here moving forward, we think that the solution that’s being put in place will genuinely go to addressing the underlying risks,” he said.
He said the partnership would focus on reducing the risk factors that drive up insurance costs rather than creating a competitor to existing insurers.
Rockliff maintained the government would deliver on its election promise of $250 household savings and 20% reductions for small businesses, though those figures are still being worked through with RACT.
“What Tasmanians care about is cheaper and fairer insurance and that’s what we’ll deliver,” he said.
Labor Shadow Finance Minister Luke Edmunds said internal government documents revealed TasInsure plans to establish a “Designated Risks Pool” allowing the government to underwrite insurance policies where private insurers are unwilling to provide affordable cover.
Edmunds has demanded to know how much taxpayer money will be put into the risk pools.
“What losses will taxpayers be exposed to,” he asked.
Rockliff dismissed the scrutiny, saying the designated risk pool had already been outlined publicly when the Trowbridge Report was released.
“That’s been evident for some time and I commend the Labor Party for reading something 6 months late,” he said.
Rockliff was flanked by industry peak body heads as he made the announcement at RACT’s Hobart headquarters today.
Tourism Industry Council Tasmania CEO Amy Hills said insurance affordability is “the number one issue that’s affecting the future viability of the tourism industry in this state.”
Steve Old from Hospitality Tasmania said some venues, particularly on King Island, are operating without any cover at all.
“They’re just relying on the fact that the place doesn’t burn down,” he said.
Old said he had been in his role for 19 years and no government anywhere in the country had been willing to tackle the insurance issue until now.
Robert Mallett from the Tasmanian Small Business Council said insurance had been “a barrier to business” for decades and congratulated both the government and RACT for coming together.
The memorandum is non-binding but sets out a framework for regular public reporting on the partnership’s progress.
