A plan by the Tasmanian Liberals to establish a government general insurer has been condemned by some brokers, and the peak body has urged caution.

Premier Jeremy Rockliff – who goes to the polls on July 19 after losing a no-confidence motion in parliament – says the TasInsure proposal is the “most significant announcement” his party will make before the election.

The state insurer – which the Liberals say would deliver premium savings – would include home and contents, small business, community groups and events, and farm covers.

The National Insurance Brokers Association welcomes the focus on improving availability and affordability of insurance, but it says the state government should “exercise caution” around any intervention in pricing or underwriting.

“Tasmania presents unique challenges from an insurance risk perspective,” NIBA told insuranceNEWS.com.au today. “In such a concentrated market, a single severe weather event or catastrophic loss could materially undermine the viability of any risk pool.”

NIBA echoes the Insurance Council of Australia’s view that there are other options on affordability, urging mitigation measures to reduce risk and the axing of insurance taxes that “unnecessarily inflate premiums”.

Local brokers told insuranceNEWS.com.au they are wary of the state insurer idea and do not believe it would succeed.  

“It’s bizarre, really. I just don’t see how it could get off the ground,” Strategic Insurance Services director David Reid said.

“There is an issue with premiums bordering on astronomical, especially in the home and contents space. But I can’t see how a state government insurance company can alleviate that.

“If they pick up a lot of business and there’s a catastrophe in Tasmania, I don’t think they’d have the money to be able to back it.”

Rosny-based Mr Reid says the announcement “shocked everyone”.  

“The whole office was talking about it. There are questions – there’s been no information provided as to how this is all going to work. How’s it going to get off the ground? It’s not simple, there are employees, claims, all sorts of stuff.” 

NIBA says it remains committed to working with all levels of government to reduce risk and help consumers.

“We look forward to engaging with the Tasmanian government to understand the proposal for a state-owned insurer in more detail, including the assumptions, modelling and long-term implications underpinning the announcement.”