Townsville Bulletin, Edition Townsville SAT 21 MAY 2016, Page 31 Time to regulate insurers By: Tony Raggatt tony.raggatt@news.com.au IT IS time to call out the insurance industry's bluster. The Federal Government's Northern Australia Insurance Premiums Taskforce report also needs to be challenged for the whitewash that it is. The taskforce report has sided with insurers, while the Government has quietly put it to one side. People here might remember the cries from insurers that they were paying out more in claims than they were receiving in premiums in North Queensland. As many suspected, insurers simply loaded costs claims at a time when Queensland endured its largest storm in a century, Cyclone Yasi. Buried in the back of the taskforce's report is an assessment by actuarial and insurance consultant Finity which puts the lie to the insurers' claims. Finity estimates that over the past 20 years in current values people in northern Australia have paid out $480 million a year in home, contents and strata insurance cyclone cover, while making $120 million a year in claims. That provides a long-term loss ratio of just 25 per cent which is very low by industry standards. However, this was not the claims cost and loss ratio used by Finity and the taskforce. Instead, Finity adopted an estimated claim cost of $290 million predicted by modelling provided by the taskforce. One wonders why we can't get the actual figures. The premium paid, claim costs and loss ratio are important because it tells us whether the insurers are ripping us off. Even so, with the 'modelled" higher claim cost, the loss ratio comes in at 59 per cent which is around the current industry mark. The taskforce concludes insurers are pricing premiums in line with risk. I have a different view. I think they panicked ahead of the 2010-12 La Nina event, fearing a big hit on a North Queensland city.Governments should be ensuring a competitive, working insurance market instead of accepting significant political donations from the insurance industry.