Cairns Post 24/03/2015 A COMMUNITY catastrophe fund to provide cyclone, flood and other weather event insurance cover to Far Northern residents is to be established by the Cairns Chamber of Commerce. The chamber will launch the scheme today to initially cover the region with plans to expand across Northern Australia. It will be similar to the former Northern Territory government’s Territory Insurance Office (TIO), now owned by German insurance giant Allianz. Chamber chief executive Deb Hancock said the mutual insurance entity would be “owned by the people of North Queensland for the benefit of the people of North Queensland” to provide affordable insurance and availability for private households, bodies corporate, strata title owners and small to medium businesses. She said the chamber was calling for pledges of between $5000 to $20,000 from businesses and individuals and grants from state and federal governments for a four-month detailed feasibility study, estimated to cost $500,000. Ms Hancock said the study would determine the dollar value of the fund and how it would work. She said since December 2012 the chamber had been trying to find a solution to soaring insurance costs being paid by residents and businesses. “The first steps were to meet the Territory Insurance Office (TIO) to determine if a ‘white labelled’ solution could be delivered for our region. Unfortunately, this was not feasible,” she said. “Subsequently, the Cairns Chamber of Commerce engaged global reinsurance brokers and mutual managers to provide expertise and guidance around how a solution could be facilitated.” Ms Hancock said the result was the community-owned insurance mutual to reduce premiums and provide cover to people who had chosen not to insure because of the high costs. She said it would broaden the spread of risk, provide a larger premium pool, a structure with improved access to reinsurance and aid long term risk management. Incoming chamber president Sam Marino said the scheme would not be competing with existing insurance companies. “Rather, the model will see the mutual working with existing insurance companies to reduce the cost of insurance by providing catastrophe cover,” he said. “This, in turn, is expected to make the insurance market more attractive, enticing more insurance companies back to the region and again, in turn, reducing the cost of insurance. “Conventional insurers would continue to provide traditional cover, such as fire and theft, while natural catastrophe cover would be dealt with via a mutual structure owned by the community of Northern Queensland and controlled and administered by an entity established by the Cairns Chamber of Commerce. “Reinsurance will be part of the solution and will be applied to minimise the risk borne by the mutual.” Outgoing president Ron Tong said the chamber was seeking funding to hire specialists to undertake a detailed four-month feasibility study for an in-depth business plan and strategies to establish the mutual.