Industry consultant John Trowbridge says Tasmania’s Liberals must thoroughly run the numbers and assess their business strategy before proceeding with a plan to create state-owned insurer TasInsure. 

Governments aim to keep premiums low but have to add capital if making losses, he says.  

“It’s questionable whether a Tasmania-only insurer can run the business better – and at a lower price for the customers – than one that’s part of a national or an interstate operation.”

The Liberals should conduct a full cost-benefit study and be aware “expertise and competence are important; you have to recruit the right people”, he tells insuranceNEWS.com.au.

“If they think it’s a genuine opportunity that would assist the community, the first thing they have to do is study the potential. They would need at least two years to set it up properly. It’s going to take time.”  

Mr Trowbridge says he worked on the privatisation of GIO decades ago, when the sale of public assets was the trend.  

“They all went from the government because it’s very difficult for a state government to successfully operate an insurance company. I do remember around that time, almost every state government, within a few years, withdrew from the insurance business.”  

Underwriting and managing claims effectively is “always a challenge in any insurance business. When the government owns it, there is an inherent conflict in keeping prices down and maintaining a profitable business. The competitive market is what normally keeps some check on rising prices.”  

The Liberal Party should seek expert advice on its claim that premiums would be $250 lower for residents and 20% lower for businesses under TasInsure, Mr Trowbridge says.  

“How will they achieve that? Do they believe there’s some kind of exploitation going on at the moment?"

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