North Queensland insurance premiums soar following cyclone activity

Insurance premium costs in North Queensland have risen by 80% over the past eight years, a Federal Government report has found.

According to research by the Australian Government Actuary, the region faced the nation’s largest increase in insurance cost between the 2005/6 and 2013/4 financial years.

Whereas the average home and contents rates only increased by 25% nationally during the same period.

The Federal Government’s independent actuary found that insurer reactions to increased claims caused by Cyclone Larry in 2005, the Mackay storms in 2007, and Cyclone Yasi in 2010 were behind the rate rises.

Insurers paid out $1.40 for every $1 they received in premiums during the period analysed.

Developments in cyclone modelling technology and increases in the cost of catastrophe reinsurance were also identified as contributing factors.

A high increase (45%) in the cost of home and contents insurance policies was also recorded in Brisbane. In contrast, the cost of policies in Sydney and Melbourne only increased by 12%.

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