On 25 May 2017, the Australian Government directed the ACCC to conduct a wide-ranging inquiry into the supply of home, contents and strata insurance in Northern Australia.
Scope of inquiry
Matters to be considered by the inquiry shall include, but not be restricted to:
- the pricing and availability of insurance to consumers in northern Australia;
- the key cost components of insurance pricing in northern Australia and how they have changed over time, particularly catastrophe risk;
- the terms and conditions on which insurance is supplied;
- the competitiveness of markets for insurance in northern Australia;
- the existence and extent of any barriers to entry, expansion and/or exit in the supply of insurance in northern Australia;
- any impediments to consumer choice, including transaction costs, a lack of transparent information, or other factors;
- identifying any regulatory issues, or market participant behaviour or practices that may not be supporting the development of competitive markets for insurance in northern Australia; and
- the profitability of insurers through time and the extent to which profits are, or are expected to be commensurate with risk.
The inquiry will commence on 1 July 2017. The ACCC must submit interim reports to the Treasurer by 30 November 2018 and 30 November 2019. The inquiry is to be completed and a final report submitted to the Treasurer by 30 November 2020.
The ACCC will release an issues paper for public comment later this year.
Definition of Northern Australia
For the purposes of this inquiry, northern Australia has the meaning given in section 5 of the Northern Australia Infrastructure Facility Act 2016. This definition broadly corresponds with the Northern Territory, those parts of Western Australia and Queensland that are north of the Tropic of Capricorn, and some areas just south of the tropic, including Carnarvon and Gladstone.
A map of the area covered by Northern Australia.