Last Email in Saga - Townsville Bulletin, Edition Townsville SAT 28 MAY 2016, Page 31 Insurers' cyclone claims blown out of water By: Tony Raggatt tony.raggatt@news.com.au I ACCEPT we need to better protect our property to withstand cyclones. What I don't accept is a representative insurance body controlled by a couple of powerful corporations playing fast and loose. As raised last week, the Northern Australia Insurance Premiums Taskforce recently released a report which completely blows out of the water claims by insurers they are paying $1.40 in claims for every $1 they take in premiums in North Queensland. This week the insurance council took issue with my use of the report's figures. Well, either the taskforce's actuarial consultant, Finity, and the 'best scientific estimates currently available" are way off the mark or the insurers' claims are wildly exaggerated. Finity estimates insurance losses due to cyclones - category one or stronger - in northern Australia over the past 20 years to be around $120 million a year in current dollar values. This compared with a premium pool for cyclone cover around $480 million a year. Finity noted the total premium pool in northern Australia was around $1 billion. For insurers to suggest they are paying out $1.4 billion a year in claims is so absurd as to be unhinged. Evidently concerned the historical claims estimate might be understated, the taskforce commissioned modelling indicating the long-term future losses from cyclones could be around $290 million a year. It seems we are paying sky-high premiums based not on what has happened but on what could happen. Finity also estimated that a typical Townsville home had the highest cyclone premium of any major centre in Australia at $2059 compared with $1326 in Cairns and $394 in Darwin. If we are going to be cut loose, we need more transparency in insurance loss ratios in northern Australia and acknowledgment cyclone losses have not been as bad as some make out. We also need more competition by having more insurers.