The Tasmanian government has released early draft legislation for its proposed state-owned insurer, TasInsure, despite the absence of financial modelling or a comprehensive business case to support the initiative. Premier Jeremy Rockliff introduced a consultation paper today, promising that TasInsure would offer “cheaper, fairer, and Tasmanian-owned” insurance solutions.
However, Premier Rockliff confirmed that the government has not yet commissioned Treasury advice or completed cost projections for the scheme, which was a pivotal election promise. When questioned about the lack of prior financial modelling, he responded, “Because it’s being done now.”
Rationale Behind TasInsure
Premier Rockliff highlighted the significant rise in insurance premiums, noting an average increase of 35% and some businesses experiencing hikes of up to 300% over the past five years. “The market has failed,” he stated. “When markets fail, it’s important that governments do step in.”
He assured that TasInsure would function as a not-for-profit entity and claimed it could save households an average of $250 annually. “When you consider increases in insurance premiums worldwide, when you consider the profit margin as well, we believe that we can reduce insurance premiums by that amount,” he explained.
Rockliff pointed to the state-owned Motor Accidents Insurance Board as proof the model could work, noting MAIB premiums had risen 5% compared with the market average of 35%.
Community and Industry Reactions
The consultation period for TasInsure will run until January 9, with the government employing a consultant to gather feedback from the community, businesses, and the insurance industry. The draft legislation is slated to be tabled within the government’s first 100 days, concluding on November 28.
Launceston business owner Karen Burbury of Eski Group expressed concern over the rising insurance costs affecting her agriculture, accommodation, and restaurant businesses. “Across the probably last five years we have been really trying our best to try and mitigate the cost of insurance,” she said. “But unfortunately as a small business in Tasmania we can’t go to a standalone insurer.”
Burbury shared that she had personally saved more than $6,000 on her home insurance by switching providers this year. “I am really concerned about small businesses not insuring themselves correctly and I’m really worried about our vulnerable in our community that are choosing to not take out insurance because it’s become so expensive,” she added.
Political and Expert Criticism
Meanwhile, Shadow Treasurer Dean Winter criticized the proposal for lacking a business case, financial modelling, risk analysis, pricing, and details on the specific products TasInsure would offer. “Rising insurance costs are a serious issue affecting Tasmanians. They need serious solutions, not a hoax,” Winter remarked.
“[The premier] said there was a business case and modelling, but that it couldn’t be released because he did not want TasInsure competitors to read it. That was not true,” Winter said.
Looking Ahead
The announcement of the draft legislation comes amid increasing scrutiny of insurance costs across Tasmania and the broader Australian market. As the consultation period progresses, the government will likely face mounting pressure to provide detailed financial analyses and risk assessments to substantiate the viability of TasInsure.
As the debate unfolds, stakeholders from various sectors will be watching closely to see how the government addresses these concerns and whether TasInsure can indeed deliver on its promises of affordable and equitable insurance solutions for Tasmanians.
