ADJOURNMENT
Mr LITTLEPROUD (Maranoa) (11:07): I rise to update the House on the unfolding insurance crisis in western Queensland. Just to recap, back in 2011-12, St George, Charleville and Roma had huge floods that inundated our communities. There was no protection.
There were no levee banks. Effectively the insurance companies—rightfully, in their defence—lifted insurance premiums by 90, 100 or 120 per cent until such time as levee banks were built to protect those communities. Fast forward to 2015, and those levee banks were completed.
In defence of the insurance company, Steve Johnston, the CEO of Suncorp at that point, said that as soon as concrete was poured on those levee banks he would reduce insurance premiums. He was a man of his word then. He reduced the insurance premiums.
In those communities we enjoyed relatively normal insurance premiums for 10 years—around $2,000 or $3,000 to insure a home in those communities. Eighteen months ago, for no apparent reason, despite the fact we've had three major flooding events that have tested those levee banks around those communities and proven them to work—there was no claim—we have seen increases of over 300, 400 and 500 per cent in insurance premiums in those communities.
When you ask them the question, 'What has changed?' they kick the dirt, they look at the ground and they know they do not have the answer. They are gouging these people in western Queensland, so much so that I made a referral to the ACCC. Further investigation of this issue warrants the ACCC to take further investigation into how your insurance premiums are determined.
This comes from the National Flood Information Database. The National Flood Information Database is owned and managed by the Insurance Council of Australia. The Insurance Council of Australia is owned and managed by the insurance companies of Australia.
Its board of directors are the CEOs and senior executives of all the insurance companies in this country. This is the fox in charge of the henhouse. The fact that Australia is the only country in the world where the flood data is not made public or transparent to any Australian for them to know how their premium is being determined, effectively, by the Insurance Council of Australia is an abhorrent failure of good governance in this country.
How can we let the insurance industry determine how the modelling of our premiums is determined, at whim and without any transparency or public oversight? I have written to the ACCC, asking them to expand their investigation into the CEO and the board of directors of the Insurance Council of Australia to understand the protocols and the processes behind the determination of information that is sent to a third party to model our insurance premiums in this country.
It is abhorrent to think that we would let the Insurance Council, run by the CEOs and senior executives, determine our premiums without any transparency. This week I spoke to one of our councillors from western Queensland who was impacted, and it seems there has been a little bit of a breaking of the ranks in the Insurance Council of Australia. One of the major insurance companies actually confided in one of my mayors that they feared that the data that was coming back to them, to be used in setting their premiums, from the third-party modelling was sanitised.
It is outrageous to think that the Insurance Council of Australia is handing sanitised data back to the insurers. This needs to be investigated by the ACCC, and it needs to be investigated thoroughly to understand if the processes and protocols have been put in place to ensure good governance and fairness to every Australian, particularly to those in western Queensland.
I have pensioners that cannot insure their homes today. Their homes are now uninsurable, and that's in St George alone. A survey by the local council there said that 37 per cent of residents no longer have insurance—that's insurance for anything; forget just for floods.
They can't get insurance on their homes for anything. Overlay that with a young couple that wants to go and get their first mortgage. They can't get one, because they can't afford the insurance premiums of $40,000 to $60,000.
That would be more than double their loan repayments. If this happened in Sydney, Melbourne or Brisbane, there would be outrage. In fact, Brisbane went through a flood similar to ours in 2011.
There wasn't a levee bank anywhere near Brisbane. Their premiums still sit at around $3,000 or $4,000. In St George, Charleville, Roma and Cunnamulla, they sit at $40,000 to $60,000.
It is time the ACCC took them on. If they don't, it is time this parliament takes on the insurance industry and protects every Australian.