The Tasmanian government has scrapped an election promise to set up a state-backed insurer after an independent expert branded it “an aspiration with high risk, high cost and low chance of delivering”.

Industry consultant John Trowbridge, who was appointed to examine the TasInsure proposal, said 20 submissions were received – some “highly critical” while others “expressed support in principle but could not envisage how it might work”. 

“There is no single solution or ‘silver bullet’ in this quest for more favourable insurance outcomes for Tasmanians,” says Mr Trowbridge’s assessment, prepared for the Department of Treasury and Finance. 

Mr Trowbridge says submissions assumed the government would either compete directly with insurers operating in Tasmania or “exclude them from or crowd them out” of the market.  

“My view with only a few moments’ reflection is that such an ambition would not only be a disruption on an unachievable scale but also an aspiration with high risk, high cost and low chance of delivering,” the report says. 

The Liberals’ 2025 election pledge was for state-backed home and contents, small business, regional and community group cover. 

A shop with TasInsure branding was established in Launceston. 

But last week, Premier Jeremy Rockliff said instead a new statutory authority called TasInsure will “partner with insurers, brokers, reinsurers” to fix insurance affordability and availability gaps. 

It will offer “advisory, transparency and comparison functions”. 

Labor shadow treasurer Dean Winter says Mr Rockliff has “committed insurance fraud on every single Tasmanian ... Premier Rockliff made a promise he could not keep, claimed it was backed by modelling that did not exist, and now wants Tasmanians to pretend none of it happened.” 

The Green Party says TasInsure was a “cruel hoax” and a “thought bubble that received universal criticism from industry experts and economists”. 

Insurers have welcomed the decision.

“The government has listened and is prepared to work in partnership with industry to implement practical and effective solutions to insurance challenges,” RACT group CEO Mark Mugnaioni said. 

Insurance Council of Australia CEO Andrew Hall says Tasmania has a strong, competitive insurance market. 

Seeking to artificially drive down premiums without addressing underlying risks has “proven to be costly for taxpayers and only drive up insurance prices”, he says. 

ICA says removing stamp duty from insurance would save Tasmanian households $161 million this year and abolition of the fire services levy would save businesses $110 million.