The Tasmanian Liberals plan to establish a government general insurer called TasInsure if they win the state election later this month, but private insurers have strongly criticised the plan.  

Premier Jeremy Rockliff – who goes to the polls on July 19 after losing a no-confidence motion in parliament – says Tasmanians are “sick of having to pay higher premiums for mainland payouts and profits”.

Australia’s private insurance market, which produced about $6 billion of profit last year, has failed in the island state due to widespread unaffordability or unavailability of cover, according to Mr Rockliff.

TasInsure will be “cheaper and easier to access than anything else in the market”, he says, saving households $250 a year and small businesses 20% on premiums.  

Initial products could include home and contents, small business, community groups and events, and farm covers. The Motor Accidents Insurance Board would be expanded to establish the new venture.

“We’re stepping in with a Tasmanian solution, one that puts people ahead of profits,” the Premier said. “Under a re-elected Liberal government, Tasmanians will be able to access state-backed insurance at Tasmanian prices.

“It will be cheaper, fairer, ours. There is no doubt the national market has failed Tasmanians. Insurance is becoming unaffordable in too many parts of our state.  

“For too long, Tasmanians have been paying sky-high premiums because they are paying mainland prices to cover mainland insurance claims, or worse, they are being told they simply can’t be covered.”

Premiums in Tasmania have risen by more than 35% in two years, Mr Rockliff says, while MAIB premiums have increased only 5%. Insurance revenue in Tasmania is about $80 million a quarter, compared with more than $800 million each in Victoria and Queensland, and $1.3 billion in NSW.

The independent candidate for the division of Clark, John Macgowan, is opposed to taking insurance public.  

He said on social media platform X that TasInsure is “a hare-brained insurance scheme that will be a net drain” and such programs “inevitably become unsustainable, diminishing returns for taxpayers”.

State governments stepped back from insurance provision in recent decades in “the wake of massive unfunded liabilities running into the billions”, he says.

The Insurance Council of Australia says the proposal “poses significant risk to Tasmanian taxpayers” while failing to address the underlying causes of rising insurance prices.

It says that if the 1967 Black Tuesday bushfires happened today they would cost $4.1 billion in insured losses, and that private insurance is a critical safety net for residents of the bushfire-prone state.

It adds that the most immediate way to improve insurance affordability would be for the Tasmanian government to abolish stamp duty and the fire services levy on insurance products. 

“Overseas examples show that taking risk on to the public balance sheet is a bad idea, particularly when that risk is expected to grow as a result of climate change,” GM public affairs Mathew Jones said.

“To address the issues underlying insurance pricing, government and industry must work together. The insurance industry is committed to progressing this issue in good faith with the next Tasmanian government.”

Mr Rockliff says TasInsure is the “most significant announcement” the Liberal Party will make this election.  

“As I travel around Tassie, one of the things that keeps coming up is the cost of insurance,” he said. “It feels like every time there are floods and cyclones on the mainland, Tasmanian premiums go up. We’re going to put an end to that.”

The Liberal Party has held power in Tasmania for the past 11 years.